How does this carbon credits thing work? Did some random person pay you money for having trees? Is this a one-time thing or could you do it multiple times?
Kate, here is the process. It can be extremely daunting to get everything in order so you can qualify, but 1, 2, 3, and 6 were automatically satisfied due to the state program we were in, and we had guidance from the state every step of the way. 4 and 5 were done by the person buying the carbon credits. I would say for the average landowner, satisfying the requirements will cost more that you will make. But for us, it was a simple matter of someone asking if we would sell them the carbon credits, and us saying "Yeah, sure."
1. The property must first be certified as being sustainably managed by an approved certification system. Approved certification systems include the Forest Stewardship Council, the American Tree Farm System and the Sustainable Forest Initiative. Certification requires a detailed forest management plan and an on-site inspection confirming that the landowner is in compliance with sustainability principles. The plan and inspection may be free or with fee, depending on the certification system selected.
2. An inventory documenting the current carbon stock and projecting future growth (either by using a growthand-yield model or by calculating growth via forest inventory on an annual basis) must be conducted. A professional forester is required to conduct an inventory and to project growth. A CCX-approved auditor must verify the estimated sequestration levels.
3. A contractual commitment that assures long-term sustainability is mandatory, perhaps as much as 15 years, with a penalty associated with breaching the contract.
4. A carbon aggregator registered with the CCX must be selected and then the project is registered on the CCX.
5. Carbon credits are traded by the registered carbon aggregator and periodic payments are made to landowners based on the predicted quantity of carbon credits earned. For insurance against carbon losses on the property (e.g., fire, tornado, mortality, etc.), 20 percent of the annual credits are withheld and placed in a reserve pool.
6. Landowners are required to give an annual update if any changes have been made to the forest that would alter the carbon stock (timber harvesting, or loss to natural disturbances).
7. An inventory at the conclusion of the contract quantifies the actual amount of carbon credits earned and allows for final settlement (with consideration of the 20 percent reserve pool).