What are Carbon Credits?
Your forest’s value extends far beyond its timber. As requirements for industries to offset carbon emissions become more rigorous and more companies seek to step up environmental stewardship practices, demand for carbon credits will only become stronger. So what are they, how are they produced and why do they matter for your property?
How is carbon stored in forests?
Let’s start with a couple of simple definitions. Carbon sequestration is the process of capturing and storing atmospheric carbon dioxide. Naturally, trees store carbon as a product of photosynthesis, which is the process of trees converting water, sunlight and carbon dioxide into fuel for growth. A hardwood tree, like an oak, has the potential to sequester about one metric ton of carbon dioxide by the time it reaches 40 years old. If a hardwood forest is given the opportunity to mature, this natural process for carbon storage has tremendous potential to reduce the amount of greenhouse gas in our atmosphere.
A carbon credit is how that stored carbon is measured, and by definition that is a transferrable instrument that is certified by governments or an independent certification body to represent an emission reduction of one metric ton of carbon dioxide. Through assessment and modeling, NativState can measure your forest’s current carbon mitigation as well as how many carbon credits it could generate once an improved forest management plan is implemented.
How are carbon credits measured?
All forests will store various levels of carbon naturally as trees and plants grow, depending on the species, region and climate. At NativState, our foresters are particularly fond of oak trees for their dense wood, long life and tremendous carbon potential. That oak tree, and the many other trees surrounding it, will naturally store carbon as the forest matures, without carbon market incentives or human intervention. This is the baseline level of carbon sequestration. Additionality is the measurement of how much more carbon could be stored if an improved forest management plan is implemented, or additional reductions and/or removals that would occur as a result of that plan.
To demonstrate additionality, there must be an assumption that the improved forest management plan will provide additional carbon storage than what would have occurred naturally and without market incentives. This concept is incredibly important as it validates a property’s potential to generate additional carbon credits, which must be then verified by a carbon registry like the American Carbon Registry.
Carbon credit development at no cost to you
When NativState begins work on a property for carbon development, our goal is to place each acre in its highest and best use. Our foresters and environmental engineers will complete a full assessment of your property’s carbon potential to maximize value and meet the landowner’s long-term goals for their forest.
The expenses for this plan, its implementation and ongoing management is free to the landowner, who not only receives the benefit of additional revenue, but also pride in sound stewardship of their forests. Landowners will receive a portion of the revenue, or royalty, in accordance with the carbon agreement determined at the onset of enrollment.
What to look for in a forest carbon developer?
Landowners who are exploring offsets should look for these three attributes of a carbon developer to feel confident they are enrolling their property in the best forest carbon program to achieve their long-term goals.
Carbon accounting is complex, and landowners should invest the time in understanding a project developers’ method for calculating additionality. To use a carbon credit to compensate for or neutralize the emissions arising from business operations, the credit must provide an ‘additional’ carbon benefit above and beyond business as usual for it to authentically meet a company’s net-zero needs. NativState registers credits with the American Carbon Registry, the market standard for nature-based carbon offsets, and a reputation for integrity, innovation, and impact.
Emissions that are removed or reduced need to be permanently removed or reduced to neutralize residual emissions for a company. Landowners should partner with carbon developers that are providing confidence and verification of permanence through alignment with a standards body such as the American Carbon Registry, and a dedicated plan to long-term monitoring and engagement of the properties enrolled in a forest carbon program.
Carbon projects should be more than transactional interactions between project communities, developers, and carbon buyers. Rather, carbon markets should ignite engagement — which is a critical shift towards long-term impact. Access to carbon markets solves the cost challenges for small forest owners; but pairing it with continued education and guidance helps shift the landowners’ long-term relationship with their land. This deeper engagement with on-the-ground stakeholders is key to a successful forest carbon project.