Carbon Credits 101

Tim Foley, Policy Director - Southern Group of State Foresters

LSU Ag Center - 2022 SOUTHEAST REGION FORESTRY FORUM
April 1, 2022
 Outline

• History of Carbon Markets in the US

• Introduction to Carbon Market Terms
• Overview of Current Programs
• What Should we be Thinking About?
• Q&A
 SGSF Mission

Southern Group of State Foresters

Represent the State Foresters from across a

13-state area, Puerto Rico and the US Virgin
Islands

Provide leadership in sustaining the

economic, environmental and social benefits
of the South's forests, and work to identify
and address existing and emerging issues and
challenges that are important to southern
forests and citizens.
 How Did We Get Here?

• Carbon markets have been around since the 1990’s, as a

way for those emitting Greenhouse Gases to “offset” their
own emissions.
• Forest carbon markets like CCX and VCS rose to
prominence in the late 2000’s, in response to potential
climate legislation for “cap and trade”.
• In lieu of federal legislation, regional climate efforts
became the primary option.
• With recent focus on climate solutions, but no sign of
federal legislation, the private sector has grown with many
different voluntary market forest carbon opportunities.
 Key Terms and Concepts

• Regulatory (aka compliance) vs. Voluntary Markets

• Additionality - a project must sequester carbon that is in addition to what
would have occurred in the absence of the project.
• Baseline – How one measures additionality. Could be business-as usual,
regional averages, counting from a base year, or other methods.
• Leakage - when a carbon sequestration project causes unintended increases or
decreases in GHG emissions elsewhere.
• Permanence - the degree to which sequestered carbon is “permanently”
removed from the atmosphere.
 Who are the Players

Project Project Verification Registry /

Developer Buyer
Proponent Standard Marketplace

That’s who That’s who gives

That’s where
That’s you! comes knocking validity to the That’s who wants
developer your carbon is to take credit for
at your door sold your carbon
methodology
 What are some of the program options

• Older program options have existed for 10 yrs+ with a focus on enrolling large
landowners in compliance markets (CARB, RGGI, etc)
• Finite Carbon (https://www.finitecarbon.com/)
• Blue Source (https://www.bluesource.com/)
• TerraCarbon (http://www.terracarbon.com/about.html)
• ACRE Investment Management L.L.C (https://www.acre-investment.com/)

• Newer program options focus on getting smaller landowners engaged in voluntary

carbon market opportunities
• Natural Capital Exchange (NCX) (https://ncx.com/)
• Family Forest Carbon Program (FFCP) (https://www.familyforestcarbon.org/)
• Core Carbon (https://corecarbon.com/)
• Green Trees (https://www.green-trees.com/)
 What can I get paid for?

$$$
Current prices estimates
• Extending rotation age (ex – NCX has 1-yr contracts to
 $19/ton C in regulatory
defer harvest)
market • Improved Forest Management (ex – FFCP has 30-yr
 $6-15/ton C in voluntary contracts for IFM in both new and mature forests)
market. • Afforestation/Reforestation
 40-80 credits/ac. • Avoided Forest Conversion
• Urban forest opportunities
• Carbon stored in wood products
For a quality offset, whatever you do needs to generate “additional” carbon on the landscape
compared to a “baseline”, which achieves a level of “permanence” desired by the buyer.
 What should I/we be thinking about?

From a Landowner Perspective

• What kind of commitment am I making? For how long?
• How does it impact other values for my land (ie – aesthetics, wildlife, timber, etc)?
• Does it make financial sense? Does it make ecological sense?
• Is it too good to be true?

From a Forestry Perspective

• What impact might carbon markets have on timber markets? At what price point?
• Do carbon markets align with promoting a healthy and sustainable forest resource?
• Are we losing sight of other ecosystem benefits/markets (ex – water quality) in focus on carbon?
• Are we maintaining public trust in our sector/profession?
 State Forestry Agencies as a Resource

 With the emergence of voluntary markets, the forest carbon world as been
labeled as “the wild west”

 State agencies should build on what they currently do best – providing landowner
education, information and technical assistance.
o Include information about carbon markets in landowner education and technical
assistance activities and provide staff and landowners with additional training to
accomplish this.
o Develop publications and other communication tools to strengthen employee
knowledge and understanding about carbon sequestration and how to engage in carbon
markets.
o Provide localized information about regional carbon storage demand and supply to
assist landowners in price negotiations.

https://www.stateforesters.org/state-defined-solutions/forest-carbon-network/
 QUESTIONS???
Contact: Tim Foley, Policy Director
Southern Group of State Foresters
tfoley@southernforests.org