A Landowner’s roadmap to entering the carbon market and the process.
Private, industrial, tribal, and public landowners are all eligible to participate in forest carbon markets. There are five steps to get a voluntary carbon program into action.
The first step typically is for a landowner to contract with a private carbon project developer who will work with the landowner to oversee, develop, broker, and market the carbon project (typically for a fee — percent of sales proceeds). Developers are independent from the registries. The developer will determine whether the land parcel is eligible under a carbon registry protocol and if the project would be financially feasible. Typically, this step is free or has only a nominal fee and does not require a commitment.
The assessment will require the landowner to share information on the characteristics of the forest parcel, like forest type, size, and stocking, as well as information on any legal constraints on the parcel, like easements, planned management, and parcel operability that may limit harvesting. While the land parcels do not have to be contiguous, they will require a single landowner unless project aggregation is an option.
A current active management plan speeds up this process. Suppose the project is eligible and financially feasible. In that case, the official project development stage starts and the developer will quantify carbon stocks by doing a sample inventory of living and dead trees and estimate potential offsets from the project using by modeling average stocks over the baseline scenario and the project’s scenario. The difference between the carbon stocks in the project scenario and the baseline is the additionality and the basis for the number of offsets generated. IFM projects require a forest management plan that will describe the silvicultural prescriptions to be implemented to achieve higher carbon stocks compared to the baseline.
Economic Viability: Is it Worth it?
It is not cheap or easy to jump into the carbon market. Upfront project development costs can be large, making it daunting unless those costs can be spread over many acres of ownership, and the complexity of the process can make it difficult to navigate without a project developer.
Generally, the threshold for financial viability is about 2,000 acres, although this is by no means a technical or legal requirement. As carbon markets evolve, improvements in the process may simplify the process and efficiencies may bring down the costs. The costs for the sale of carbon could also rise, making the overall benefits worth the trouble. So, while current markets favor large forest parcels, the rapid evolution of the voluntary market means new options are becoming available on a regular basis.
Market price for offsets
Expected scale of offsets
the project will likely yield (dependent on forest type, accounting methodology, project size, and, in the case of IFM, practices implemented).