Trading Carbon Credits

[Larry]

Anybody know about the program?

A brief description about how it works that I copied off a website.

How Carbon Trading Works

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Landowners earn annual payments for storing carbon in their forests and soils via Dogwood Carbon's linkage with the Chicago Climate Exchange (CCX). Founded in 2003, the CCX is attempting to provide a market-based mechanism for reducing greenhouse gas emissions. Large-scale greenhouse gas producers (energy companies, paper mills, factories, etc.) voluntarily participate in the CCX as carbon credit buyers. These companies look to landowners, farmers and other carbon sequestering projects as carbon credit sellers to offset greenhouse gas emissions. Carbon credits are traded between buyers and sellers on the Chicago-based CCX much like soybeans and pork bellies are traded on the Mercantile Exchange. For more information, go to www.chicagoclimatex.com.

A link to the brokers site.
http://www.dogwoodcarbon.com/index.htm

I'm asking because I have forest land in a CRP contract with 13 remaining years.  From what I've read, my ground meets all the eligibility requirements.  All I would have to do is enroll to receive back payments plus future payments.  Missouri hardwoods average $18 per acre, per year at present.  Seems a little to good to be true when ya add that payment on top of CRP payments.

[Texas Ranger]

How much are your kids or grandkids gonna have to  pay back when they cut them suckers?

[Gary_C]

To me, these programs are a fraud. There has been nothing gained by buying your right to polute.

There has long been a similiar program with wetlands. If a developer wants to fill in a wetland for a development, all he has to do is buy up an equivalent amount of wetland and set it aside from future loss. So there is still a wetland loss and the developer paid for the right to erase a wetland. Sure, the other wetland owner gets a good price for his wetland, but is that any help at all in stopping wetland loss?

[Ron Wenrich]

That wetland scam also has it where they can "make" a wetland someplace else.  Seems to me that if there was a need for a new wetland, mother nature would have made one there a long time ago. 

As for the dogwood site, it states you have to plant trees.  That implies that you can't enroll your forest that is currently growing trees. 

It sounds like its set up by a bunch of bean counters that really don't know much about how a forest grows.  Younger forests sequester more carbon than do older forests.  And, as stated, what happens when you cut them down?  Do they get their money back?  You should be able to grow more than $18 worth of wood per acre on your current forest without any constraints.

[WDH]

I am familiar with wetlands mitigation.  If you develop a wetland, you have to mitigate by buying an equal amount from a Mitigation Bank.  A Mitigation Bank is a tract that was formerly wetlands, say a bottomland field or a ditched and drained site converted to a pine plantation, that is being fully restored back into its original vegetation.  When you buy into the mitigation bank, the amount bought is under a servitide contract that requires the area purchased be maintained in the wetland in perpetuity..  In order to mitigate a developed wetland acre, you just can't buy any acre of wetland to replace it; you have to buy an acre that was once converted, but is now being restored.  It also has to remain in wetland for perpetuity, so once all the acres in the Mitigation Bank have been purchased, the bank is maintained forever.  It can never be developed or changed in any way. 

[Tom]

I know a little about them too.  The 200 acres to the east of me is a wetlands mitigation bank (or at least credits in the bank).   They took a perfectly good hill, cut 2 feet off of it and planted cypress and gums that have never come up.  The credits have been sold as well as the 2 feet of dirt they took off of the top. Not only do they not have a wetland, but they don't have a highland either.  They destroyed an ecosystem that isn't politically fashionable to accept, to create an ecosystem that they deem un-developable.  They failed and we are stuck with a cleared piece of property that, I'll bet a dollar to a donut, will be houses within my lifetime.  All it will take is someone with a pocketfull of money and the right connections.

[WDH]

It sure does seem political to me as I learn more about it.  Bureaucratic and political.  I am heading up a project for my company to establish a mitigation bank.  I bet I am in for an education and a frustration .

[Tom]

Well, don't let them bamboozle you into thinking that they are great environmentalists.  :D

The hill next to me was growing great slash, loblolly and longleaf until they decided that it needed to be a wetlands. It seems that they don't consider the ecosystem they are destroying, and the existing wetlands don't qualify for the same amount of money as wetlands that are created.  Some aren't even allowed.

[Tillaway]

There is a new player in in forest land ownership in the NW.  It happens to be an environmental group that is putting its money...err... its investors money, where their mouth is.  Carbon credits are an integral part of their business plan.  For  a measly 1 million bucks you can invest in a  REIT located in the beautiful temperate NW coastal rain forests of Oregon and Washington, that they spent too much $$ to acquire in the first place.  Granted your investment will lag the return of conventionally managed forest land for just fifty years.  After that they expect to out perform conventional management.  That is if the lumber market does not changes between now and then, or Russia does not sell carbon credits in Siberia or ...

They never said they would not develop it... hmmmm.

[Tom]

.....or lightening doesn't set a fire and burn it.  :D

Smoke and mirrors.  It's all smoke and mirrors.  :D

[WDH]

Nope, existing wetlands don't qualify for mitigation. The authorities figure that it is already a wetland, so why should they give credit for it to the developers?  They want to see converted land put back into wetlands.  But remember the book by Thomas Wolfe, "You Can't Go Home Again".  You can't stop, progress, only adapt to it.  Trying to "restore" what once was is in some ways very idealistic.  The taxation laws are driving land owning timber companies to sell their land because they can't compete growing trees.  To me, that is a sad situation.  Food and fiber made this country what it is.  Soon, we will be depending on those folks overseas for it.  Not good IMHO.  I heard today that chicken feed might be contaminated by that same chemical that is killing pets.  Pets, chickens, then us.  I guess it is just global economics, huh ???.

[Tom]

"Global Economics".   Something else that makes me grind my teeth.  That, and the New World Order.  >:(

Converted land returned to wetlands doesn't follow either.  This land next to me has never been developed or filled.  It has always been river swamp and a hill growing pines and hardwoods.  What they have tried to turn into a wetland is/was the tallest "hill" around here. I'm not sure what the Fla. law reads, but it is probably along the lines of Created Wetlands. 

After some litigation, I understand that the river swamp was allowed into the mitigation bank at a very low price per acre, whereas the highlands were allowed at a wallet twisting 20 to 50 thousand an acre.

[Redonthehead]

I read that article in a local newspaper last weekend. I too think much of it is smoke and mirrors, ESPECIALLY on land that is already growing "carbon". ie: so you enrolled your land in CRP/trees. The gov't is already paying you to grow trees. Why should you get "carbon credits" for what is already being done? retroactive?  >:(

Now if you have an existing cornfield and want to start a program and one part of that is the carbon contract, then fine. That's new.

I would like to learn what I would have to do for the wetlands mitigation. Say I own a 100 acre cropfield in the riverbottom. How much would developers pay me to build levees and PERMANTLY convert that land to a wetland mitigation???  Would it pay $1k per acre? Can you double dip with Wetland Reserve Program (type of CRP) and Wetland Mitigation? Surely not. AND then plant willows on it and triple dip with Carbon Contracts - the head swoons.... :D

[Gary_C]

Yes, I am guilty of oversimplifying when I said they just buy a wetland and set it aside from future loss. The way the scam actually works is they buy cropland that has been tiled and then put non perforated tile in the low areas and claim to have restored those lowlands as wetlands. In many cases they can just continue farming the land except in wet years when they just leave those pockets and work around them.

The reality is if you want to fill in a wetland, you sure can if you have enough money.

Can you double dip with Wetland Reserve Program (type of CRP) and Wetland Mitigation? Surely not. AND then plant willows on it and triple dip with Carbon Contracts - the head swoons.... :D

No, won't work. They have specific rules for what you can and can't do.

[WDH]

The prices that I have seen range from $6000/ac to $40,000/ac with $15,000 - $20,000 being the average.  Price depends on the quality of the wetland as calculated by the Corps of Engineers formula.  The greater the restoration in their opinion, the more the bank owner can charge on the market.

[crtreedude]

A subject I actually know something about!

The idea is that you cannot change over a business overnight. Lots of money goes into power plants for example. You can't just decide to take it out of production - so you offset it with growing trees elsewhere. The trees have to be planted and they have to be maintained as a forest for 25 years - after that, it is actually better if they are harvested as lumber, because that frees up the land to produce more carbon products.

Unlike filling in a wetland and making a new one, this does not destroy existing forest - just creates an economic incentive to make more.

I am not overly fond of a global order either - but we are all on the same planet. As I like to tell people, you are probably breathing my air... When someone buys carbon credits, they are merely buying something like buying coal. Legislation making this a requirement is part of a global treaty - but we do things like say people shouldn't fish for certain fish globally, sell elephant ivory, etc. This is because those who buy and those who produce are separated. Much like in the USA we have federal laws and state, and even local.  The law (or treaty) has to be formed at the effected level. What I don't like is when laws are pushed down from the federal level that should be dealt with at the state or local level. For example, a nation wide law on guns is a mistake in my opinion. The needs for gun control in small town in Texas is very different from the needs in NYC.

[OneWithWood]

CR - you are right on that last point.  No need for a gun in small town Texas.  ;D

[Greg]

Anybody know about the program?

A brief description about how it works that I copied off a website.

How Carbon Trading Works

[/size][/b]

Landowners earn annual payments for storing carbon in their forests and soils via Dogwood Carbon's linkage with the Chicago Climate Exchange (CCX). Founded in 2003, the CCX is attempting to provide a market-based mechanism for reducing greenhouse gas emissions. Large-scale greenhouse gas producers (energy companies, paper mills, factories, etc.) voluntarily participate in the CCX as carbon credit buyers. These companies look to landowners, farmers and other carbon sequestering projects as carbon credit sellers to offset greenhouse gas emissions. Carbon credits are traded between buyers and sellers on the Chicago-based CCX much like soybeans and pork bellies are traded on the Mercantile Exchange. For more information, go to www.chicagoclimatex.com.

A link to the brokers site.
http://www.dogwoodcarbon.com/index.htm

I'm asking because I have forest land in a CRP contract with 13 remaining years.  From what I've read, my ground meets all the eligibility requirements.  All I would have to do is enroll to receive back payments plus future payments.  Missouri hardwoods average $18 per acre, per year at present.  Seems a little to good to be true when ya add that payment on top of CRP payments.

I'm aware of an organization in KY that is in the early stages of putting together a similar thing, carbon credit program for private landowners.

At first glance, its basically free money to the landowner, similar concept to CRP. Whats better about this program than CRP or wetlands holdbacks (to me) is that this not a government subsidy.

The problems arise is in order to achieve eligibility there must be a working forestry plan done, plus a biomass inventory. Some landowners already have this in place. If you have to pay for those things separately, the $$$ earned in credits may end up being a wash with the additional consulting work required. Although the market prices will fluctuate, I seem to remember the current ballpark payout of $4 on acre or so, in ANNUAL payments, which aint bad for doing nothing but sitting back and watching your trees grow!

You can still harvest timber on the land, in concert with the management plan, and continue to get the credits, but then again after a harvest, the inventory must be (at least partially) redone, and this costs $$$.

I will check out your link when I have a bit more time. Keep us posted,
Greg

[ely]

i wonder if those are similar to the green credits or whatever they are called that power plants sell/trade with each other.
i think like gary c on that idea, of why should you be allowed to pollute just because you can afford it. it is really just a scam for the gvernment to get more money.
i know that our coal fired generating plant is one that has a few credits left over each year and they do sell them to the other companys not so clean running coal fired plant.

not good in the long run imo.

[Greg]

i wonder if those are similar to the green credits or whatever they are called that power plants sell/trade with each other.
i think like gary c on that idea, of why should you be allowed to pollute just because you can afford it. it is really just a scam for the gvernment to get more money.
i know that our coal fired generating plant is one that has a few credits left over each year and they do sell them to the other companys not so clean running coal fired plant.

not good in the long run imo.

1

I share the opinion of those who are highly skeptical that any improvement in the environment occurs because of these types of programs. (In fact, its arguable they makes things worse in the big picture.)

But saying it is "a scam for the government to get more money" is just plain void of facts. Governments, (other than the setting of legislative caps for emissions that companies must meet, like the EU has) is not invovled, doesn't make or spend a dime on carbon credits. These markets are entirely in the realm of private industry.

Greg

[crtreedude]

Carbon credits have helped plant thousands of hectares down here - yes they do help. Otherwise, a farmer finds it very hard to live while waiting for the wood to mature.

[flip]

Isn't this Kyoto Treaty on a smaller scale?

[crtreedude]

Kyoto Treaty started the ball rolling - but you can buy (or sell) carbon credits without being part of the treaty I believe. The treaty determined the reduction goals (or offset), this is a method.

[Larry]

To answer a few questions...I have a forestry plan, all trees were planted in the mid 90's making it a young forest, and I have documentation of trees planted per acre.  Since the trees are putting away max carbon my acres command a higher price.  I have all of the requirements necessary to sell carbon credits.  I made a few calls today and found the "hook"...I can't cut any trees until after year 2010, unless it is for TSI and in my forestry plan.  After 2010 no other "hooks".  The credits are sold and paid for on a yearly basis so it is possible the rules could change.  No penalty to pay in 40 years when the trees are ready for harvest.  I'm also eligible to collect payment for years 2003 through 2007 when my enrollment is approved.  I'm not thinking about selling carbon credits on mature forest ground.  I found out about this program in a publication put out by the University of Missouri Agroforestry Department...I doubt they would publish anything if it were a bogus program.  Our state forester is fully aware of the program...trying to illicit some info out of the state forestry department at this time...sometimes they are tight lipped about commenting on a private programs.

[Greg]

Like I said, free money, if your ducks are in a row. Good luck!

I will post a link on the KY program once it rolls out.
Greg

[Larry]

Little more I googled up.

Last year the NRCS gave a grant to these states.  IN, OH, MI, PA, IA, NE, KS, MO, IL, ND, NM, NY, VT

The purpose of the grant.

"Carbon Credit Generation Program: Cost Effective Procedures to Estimate, Aggregate, Verify & Deliver Carbon Credits to Private Sector Markets" through the entity of the Chicago Climate Exchange.

Just thought I would post so you guys can find out what your state did with it's grant money.

Some states are doing there own thing...Georgia passed the "Georgia Carbon Sequestration Registry Act".  Whats that all bout WDH?  To much lawyer language in there for me to figure that one out. :-[

[jim king]

I have been to a couple of meetings here in the Amazon about carbon credits and left confused both times.  As I understand it the object is to plant new forests which grow and obsorb carbon.  First thing we would have to do is cut down the old growth forest that gives off more carbon than it absorbs and no one wants that either.

I can see where this might work in an area that has had heavy deforestation over the years such as the States and Central America but it just doesnt seem to fit with reality here.

I have never been able to get an answer to a simple question and maybe some one here can answer it.  Which absorbs more carbon a year, an acre of corn or an acre of old growth forest ?

[WDH]

Larry,

I don't know much about the Georgia Act.  I will look into it ;D.

[Tom]

Jim,
I don't understand it all either,but, the difference is mostly that the corn is ground up and decomposed which returns the carbon to the atmosphere as CO2.   That is another part of the supposed falacy of this argument.  The plants that lock up the carbon must remain intact forever or the carbon is released.  I've read Ron W.'s take on it in several old posts and he brings out the phrase "Carbon Neutral".  I think that is what he used.  It means that there is a cycle there where no "new" carbon is being created.  How far back you wanted to trace this would determine the validity of the Carbon Sequestration argument.  Because, once upon a time, oil and coal were CO2.  You just have to determine how much is in the air for the climate that you want to keep. (or that you think is "right")  We don't know what right is, nor that we can change anything.  I guess it is a guestimate in relativity.

[jim king]

Tom:
Next question.  Is it better or worse if the cows eat the cornstalks and we and the pigs eat the corn or is that worse yet ?

[Tom]

 :D :D  I don't think the legislators have thought past the "growing-the-stalk" yet."

I think that they will have to spray it with a powerful mildicide, insecticide and fungicide, then hide it in the dark, down at the end of a long cave in the mountains(perhaps an old salt mine) and then seal the mouth of the cave for perpetuity.

Sounds kinda like holding Uranium wastes, doesn't it.  Maybe the Atomic energy users have broken ground in this. ;D

We, the pigs and cows will have to become accustomed to not eating.  It released carbon.  Perhaps we could get something doled out in compensation for what is stored. :P

[TexasTimbers]

I have just scannned this thread, and at best I am totally cornfused. All I know is that I know just enough to know I don't know nothin and I don't wanna know nothin and I don't wanna know what I don't know. This is asking to be one of those Global Warming threads.

Carbon Credits. I've heard it all now. Next thing they'll sell duplicate credits on the same acrerage and when found out the feds will make a law and prosecute them for making Carbon Copies.

[ely]

greg, the only money being made in the (government scam) that i refer to was the tax money they would garner from any sales of the credits. if these credits are for sure bought and sold on the open market like stocks and such then i would think they were subject to taxes. i could be wrong as i am already in way over my head.

the only point i will stand behind is, i dont feel the government should allow you to pollute the environment just because you can afford it. and this does happen i know because my company sells there unused credits to other companys with not so up to snuff practices.

[Gary_C]

This idea sounds better all the time. If I could sell carbon credits for the excess food I have eaten and sequestered over the years, just think of all the money I am worth now.  :D :D

[Ron Wenrich]

To me, the analogy of carbon credits is a fat man going on a diet by having someone else eat less.  The estimated market for carbon credits is $2.3 trillion.  Government may not be giving out grants, but they are validating the market and creating it by putting on limitations of output.

The most obvious source of carbon credits is in conservation, but they aren't giving anything out for that.  Let's say I was planning on buying a big hog of a car, but have decided to buy a hybrid instead.  Do I get any credit for not burning fossil fuels?  How about if I put in solar heat or electric?

For what its worth, an acre of forestland can sequester up to 2 tons of carbon per year.  Today's price was $3.70/metric ton. 

[Rocky_Ranger]

I've got two or three notebools of material on carbon credits and I still don't know nothing about them........  As far as I can tell they are not yet regulated so it's buyer (and seller) beware.  In the grand scheme of things I don't see how they will ever be coordinated or asimilated on a global scale.  The two ton of carbon per acre of trees is good, but the first 4 years after, say a clercut, the treatment actually is still a source.  At year 5 and seedlings 4 years old the stand begins to "sink" and will until it is cut again.  Waaayyy more storage than release.  Old growth doesn't count - they are more forms of source so we'd better <gasp> manage the forests.  The oceans provide more sink than anything else so I'm gonna "sell" the Pacific (but only a small protion, say 10 square miles) for $20,000 year.  I'm not greedy, but I also want to capture by payments; 2 billion years X 10 square miles X ......
See ya'll in Maui.

[WDH]

Here is some more info on trading carbon credits........

Carbon Credit Offsets for Trees
Capital Ideas - Alabama Land Owners Association
July 18th, 2007
Host: Hayes Brown, (www.afoa.org/CILive/CI070718.htm)
Guest: Teddy Reynolds (www.reynoldsforestry.com)


1) What are Carbon Credit Offsets and what timberlands qualify for selling Carbon Credits?

Carbon that is sequestered (pulled out of the atmosphere) by trees during photosynthesis is now considered a valued offset to the carbon that is put into the atmosphere by industries reliant on fossil based fuels for energy. Industries that have joined the Chicago Climate Exchange have voluntarily made legal obligations to reduce carbon emissions 6% by 2010 with the ultimate goal to become carbon neutral some time in the future.  This will be accomplished with a combination of real reductions in emissions and the purchase of offsets. The Carbon Credits are marketed to US based companies on the Chicago Climate Exchange, which operates similar to Wall-Street.

Currently there is only one approved program by the Chicago Climate Exchange for trees which is for all "afforested" pine and hardwood timberlands in the United States planted after January 1, 1990. Afforested means trees planted in previously non-timbered areas; for example, tracts that were pasture or row-crops prior to being planted. A minimum stocking of 250 trees/acre is required for signup.

Currently there is a new program under review to include working forests; which includes all forestland regardless of origin, and is expected to be approved and activated within a year.
2) What returns can a timberland owner receive from participating in selling carbon credit offsets on their timberlands?

Carbon credits are currently selling for approximately $3.50/metric-ton on the Chicago Climate Exchange. As an example, Loblolly pine plantations 0-5 years of age sequester 2.2 metric-tons/acre/year while plantations 11-15 years of age sequester 7.8 metric-tons/acre/year.

The signup period and payments are retroactive through 2003 and end in 2010. For example, if you enlist a 100-acre Loblolly pine plantation that was 11-years old in 2003, then you will receive payments for sequestered carbon from 2003 to 2010. Based on current carbon trading rates, during the 8-year signup a 100-acre Loblolly pine plantation will yield $21,945.

However, it should be noted that carbon payments will be reduced by 20% held back in an insurance pool to cover carbon credits potentially lost to catastrophic events during the 8-year sign-up, and refunded at the end accordingly.

3) How does a landowner enlist and what are the fees?

Landowners can enlist through aggregators such as Iowa Farm Bureau and Delta Institute, who have purchased seats on the Chicago Climate Exchange and sell the carbon tons in large metric ton blocks. The aggregators charge an 8-10% commission and the Chicago Climate Exchange charges a fee of 20 cents per ton.

If you enlist less than 2000 annual tons with an aggregator, then all you basically need to provide is contact information, verification of ownership acreage and planting confirmation; however, the verification requirements increase when you enlist over 2000 annual sequestered carbon tons. Is the program worthwhile for qualified landowners? Yes, as it can increase your real annual internal rate of return by as much as 1.6%. It's better than a free interest bearing checking account.

Related web sites and resources:
1) Chicago Climate Exchange Website: www.chicagoclimatex.com
2) Delta Institute - www.delta-institute.org
3) Iowa Farm Bureau - www.iowafarmbureau.com
4) George Rheinhardt, NRCS State Forester; Email: George.Rheinhardt@ar.usda.gov; Office: 501-301-3137 ex.3143.

[Larry]

Thanks for taking the time to post and keep us informed with the latest information WDH.

I'll give an update since my original post.  I've received emails from a few people including our Missouri State Forester who seems to support the program...just make sure you understand the program.  The tract that I was considering selling carbon credits is in the process of being sold.  The new owner is interested in selling carbon credits.  I'm not sure if it will happen or not.  A second tract that I'm keeping was planted to hardwoods that will make either lumber or excellent yard trees for the city folks.  It's not in CRP so I can do either or both.  My stocking rate is over 400 trees per acre so I think I might be able to do a thinning to put into yard trees and come back to sell carbon credits...and if I live to 120 I'll be able to log it also.

[WDH]

Is CRP disqualified for carbon credits?

[Larry]

No.

From what I'm hearing most of  the carbon credits sold will be on CRP acreage...at least in north Missouri and Iowa.   

[Ron Scott]

I understand that there are pretty intensive precruise requirements to determine the number of trees to establish the accuracy for credits determination for the area and then there are required periodic cruises on a scheduled basis to maintain the credits.

Does anyone know of or heard such specifics?

[Larry]

Ron, with my CRP acreage I had to have a forestry plan.  The plan called for tree spacing, number of trees/acre, and than after 5 years the forester came back to make sure I had something better than 60%?? survival rate.  According to the aggregator for Missouri this is the only documentation needed to sell credits.  No periodic cruises required...but your only selling up to year 2010.  The CRP acreage is a contract and if I cut a tree other than for TSI I would put my CRP payments in jeopardy...lot more money there than carbon credits.

I did ask about another non CRP tract where I planted trees but without a plan or forester involvement.  I was told that receipts for seedling purchases would be required and I would need some kind of verification.  I didn't ask questions or check out any details and it seemed to be somewhat of a grey area.

WDH posted this which seems to tract with everything I've heard.

If you enlist less than 2000 annual tons with an aggregator, then all you basically need to provide is contact information, verification of ownership acreage and planting confirmation; however, the verification requirements increase when you enlist over 2000 annual sequestered carbon tons.

[WDH]

I got more information on this today which I will post tomorrow.

[WDH]

Not only can you sell carbon credits, you can buy them as an individual to offset your own carbon footprint.  I haven't come to grips with having to pay for living, beyond the usual taxes :-\. 

http://www.becomeafriend.org/carbon/report.php#capitalfund

[WDH]

More information on the GA Registry:

GEORGIA CARBON SEQUESTRATION REGISTRY
OVERVIEW OF PROJECT STANDARDS

Project Definition
One or more parcels of forest land that has, as primary management objective, the annual accretion and long-term storage of carbon.  No minimum or maximum project acreage is mandated.

The Registry will accept two general types of forest offset projects:
Afforestation:
The planting or direct seeding of trees on lands that were previously dedicated to non-forest use.  Afforestation activities must have been completed on or after January 1, 1990.  Projects may be enrolled in federal, state, or local conservation programs (e.g. CRP).  Documentation of tree planting will be held by the project owner; examples include nursery/planting receipts, tax records, aerial photos, etc. 

Forest Management:
Management practices on existing forest lands that provide for tree growth that facilitates carbon sequestration.  This forest project type may include a wide variety of practices, management objectives, and silvicultural applications.

Forest offset projects may further be classified as 'restricted' or 'unrestricted'.
In order to be classified as restricted project, one of the following conditions must be met:
1.   A long term easement on all project lands that ensures that the land will be dedicated to forest uses.
2.   Transfer of lands to a land trust, non-governmental organization, or governmental body.
3.   Others means deemed acceptable by the Registry.

Unrestricted projects will not meet these requirements.

Carbon Pools Considered:
Required Pools: Above-ground tree biomass (merchantable height only), Below ground tree biomass.

Optional Pools: Soils (afforestation on old field only), forest products.

Forest Sustainability
All forest projects must have one of the following:
1.   Georgia Forest Stewardship Plan
2.   Forest Certification (e.g., Tree Farm, SFI)
3.   A forest management plan that meets the standards of a Georgia Forest Stewardship Plan

Project Location Information
Forest projects must provide:
1.   Legal description of project lands
2.   County, Deed book number and page number
3.   Topographical map(s) or aerial photo(s) of all project parcels, clearly delineated
4.   Latitude and longitude of approximate center of each project parcel

Registered forest projects will be incorporated into a GIS database administered by the Georgia Forestry Commission.

Project Reporting
The Registry is an online database.  Projects may be registered online or via hard-copy mailed to the GFC.  In the initial registration, carbon stocks will be reported for the current report year and projections will be made 10 years into the future.  Projects will report total above ground carbon stocks for each report year from an established starting year, which may be 1990 at the earliest.  The registry will automatically generate the appropriate current and projected carbon stocks based upon registration information.  The registry will also automatically generate annual sequestration rates and cumulative sequestration rates.  Projects may also be reported using inventory information (<= 10% allowable error) and SiMS stand simulation software. 

Participants will file an update for each report year.  All actual decreases in carbon stocks must be reported to the registry.  If the project continues to perform as estimated in the registration, the projected carbon stock increases are registered for the current report year.   

Quality Control
All projects must be reviewed and endorsed by a forester (GFC or independent) who has received training in the Registry program.  The GFC will review all submitted project applications before enrollment in the Registry.  The GFC will conduct project monitoring, verification, and auditing of registered projects.

[the tree lady]

Larry,

One of the CRP landowners I'm acquainted with here in MO has applied thru DC and has not been able to get a response from sending in all his needed paperwork, application, etc.  No money has been received from the landowners, who applied with DC back in April.  I think the carbon credit system will get many of its bugs worked out in the near future, but we may be 6-10 months away from a better-working system.  I continue to keep gagging myself with duct tape so I don't promote it much until the system is fully functional.

The Tree Lady

[Larry]

Welcome to the tree lady...better know as Skip. You probably don't remember me but I remember you.  I received my introduction to GOL and BMP's from you some 9 years ago in the Pusey Forest up in north Missouri.  Just read your article in SM&WL.  Have to see if we can get the boss man to put a forester tree under your handle.

I've backed off some on carbon credits as I sold the ground in CRP.  I'm working on the documentation for another farm...but it is on the back burner as I have a full plate right now.  Thanks to your input it may stay on the back burner until next year.

[beenthere]

From what I am seeing so far, the landowner will get very little of the share of the money paid for carbon...there are so many fingers in the pie along the pipeline, that not much will trickle out the end for the one growing the trees. Now, I will be first to admit I might    could  once was  may be wrong, but not holding my breath. It is, to me, a lot of wind being blown around.  Everyone doing anything with it will want their "fair" share...
the pessimistic one

[SwampDonkey]

Reminds me of the egg marketing story. Grandfather was an egg producer. He got $0.25 a dozen locally, but if he could sell to the US he could get $0.75 a dozen. The kicker was, he had to go through a broker. The broker wanted $0.50 a dozen to move the eggs.  :

[wesdor]

This thread has had no activity in some time, but I hope someone will look at my question.

Yesterday I heard of a local farmer that signed a contract for 700 acres of Carbon Credits.  I believe (but am not totally sure) that he signed with the Delta Institute.  I understand that he has a contract for $3.85 / acre per year - which comes out to over $2600 yearly payment.

He has received NO payment and is now being told that he shouldn't expect the contract amount.  He is calling back every other week and getting nowhere.

Is this a scam that is filling the pockets of the "aggregators"

In the example I am citing, it seems to me that a contract is legal and binding.  Does anyone know of actual landowners receiving payments in full? 

[Greg]

This thread has had no activity in some time, but I hope someone will look at my question.

Yesterday I heard of a local farmer that signed a contract for 700 acres of Carbon Credits.  I believe (but am not totally sure) that he signed with the Delta Institute.  I understand that he has a contract for $3.85 / acre per year - which comes out to over $2600 yearly payment.

He has received NO payment and is now being told that he shouldn't expect the contract amount.  He is calling back every other week and getting nowhere.

Is this a scam that is filling the pockets of the "aggregators"

In the example I am citing, it seems to me that a contract is legal and binding.  Does anyone know of actual landowners receiving payments in full? 

Depends on the fine print, of course :-\

I'm sure there some lawyer weasel words buried in the contract stating all the various exceptions which allows the holder to not pay out under various circumstances. To say the least, the carbon credit market is very immature and therefore I'd expect alot of risk with it. The firms that issue these credits are making speculative bets that carbon credits hold their value over time (like any commodity trader does...).

So what is the downside exposure to the farmer? Sure he doesn't get his $2600 payment, but what else is he out? Was he required to put money in up front? While it could be a breach of contract, I don't see how its a scam, if so who is making the money/how is this filling pockets of aggregators?

Greg

[wesdor]

You are correct - the farmer is out $2600 that he wasn't getting in the past.  So for him it isn't much of a problem. 

Al Gore and the rest of his crowd seem to be making a big deal of purchasing Carbon Credits and I just don't understand how this is helping anything.  Seems to me that the aggregators are making some money along the way and are not passing it on to the land owners that are giving them the base to sell the credits.

On a wider look, I can't seem to comprehend how forest land that is already there can provide carbon credits to offset pollution by rich people.  As I see it, the forest was already there taking in whatever carbon it had in the past.  Just because someone now puts it in a carbon credit foundation, doesn't mean someone else can pollute without adding to the problem. 

Bottom line - I just don't trust this carbon credit scheme.  Perhaps someone can explain it to me so I can understand how this is helping reduce pollution.  Maybe this is a good idea, but I remain skeptical. 

Thanks for your response.

[Gary_C]

No, I can't explain the carbon credit scam. To me it is just making hyprocrisy feel good.

A good example is the US Congress was made aware the US Capital power plant was old and inefficient. So instead of modernizing the plant, they chose to spend $80,000 and buy carbon credits so they could feel good about continuing to waste energy. And that money probably never got any further than the "aggregators."

[WDH]

My (limited) understanding was that to qualify for carbon credits, the property had to be in a non-tree use (non carbon-sequestrating state) by certain critical dates to qualify for carbon credits (like old agricultural fields planted to trees as in the CRP program).  What has been maintained in trees for a long time (or before the critical dates) does not qualify as I remember.

Personally, I am waiting for things to settle out before I seek to sign-up any of my land in a carbon credit program.

[Ron Scott]

That's my understanding also. The land must have been in either agricultural production or a degraded state prior to the conservation practice eligibility dates.

Grass plantings initiated on or after January 1. 1999 and tree plantings initiated on or after January 1, 1990.

Conservation tillage practices defined by the NRCS and Methane Digesters operational after 1999 with biogas flow monitoring and/or electrical metering equipment are also included.

Delta sells the credits on the CCX and returns the landowner's portion of the sale minus fees. Payment occurs within a month of the sale. Sales occur once per year. The current $3.00 - $4.00 per ton are gross sales prices. Landowners must pay for project planning, verification and CCX registration, as well as aggrgation and marketing costs.

These "transaction costs" greatly reduce the incentive to participate. Prices need to move into the $10.00 - $12.00 range for landowners to make anything.

[SwampDonkey]

Possibly might never reach profitability for the owner, since most those bean counters and scheme dreamers work with the math enough to figure a way to make them money, but not the other guy. ;)

[jim king]

Personaly I think we will be in the next ice age before anyone figures out all these carbon credit programs.

[Tom]

I've already got them figured out, Jim.  :D :D :D

[ckburnett]

If you you are in CRP, talk to your FSA-NRCS office.  The ones in my state are taking applications for carbon credits. :P

[Phorester]

In the Frequently Asked Questions (FAQ) section of the CCX website on afforestation carbon credits, there is the question, "Is harvesting allowed?"  The answer; a flat, unqualified, no- elaboration "No".

Does this mean what it says?  No timber harvesting is allowed on forested acreage used as carbon credits on the CCX?

If so, wouldn't this negate the carbon sequestration benefit of wood, that a living tree will eventually give off more carbon than it sequesters as it moves into an advanced age, but if it is harvested and its carbon "stored" in a product it will sequester carbon forever as long as that product exists?

Also, does this mean that a landowner who sells carbon credits fron his forestland can never manage it, of which harvesting is a part of management?  No thinnings, no nothing? 

[Tom]

It's all about Smoke and Mirrors, rich folks feeding poorer folks a line of bull and reinforcing their belief that money makes you smart.