Discover Answers to Questions Surrounding the Carbon Market
In partnership with: Tennessee Department of Agriculture
Carbon sequestration, the carbon market and carbon credits are phrases gaining attention in agriculture and forestry. Those who own forestland can take advantage of this emerging market by implementing new sustainable methods on the landscape.
The Tennessee Department of Agriculture (TDA) Division of Forestry, University of Tennessee (UT) Extension Service, UT AgResearch and carbon purchasing companies like Natural Capital Exchange offer insight for those who want to get involved with the carbon market, add money to their pockets and, most importantly, help to mitigate climate change.
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What Is Carbon Sequestration?
Large manufacturing companies are buying carbon credits to reduce their carbon footprint. In short, the carbon market is a way for forest landowners to profit by not cutting down trees.
Carbon sequestration occurs when a tree takes carbon dioxide or a greenhouse gas equivalent from the air and stores that gas in its trunk, branches or roots. When the tree is alive, the carbon remains trapped within it, making it a carbon stock.
“Once a landowner meets the requirements to establish a carbon project on their forestland, they can sell credits on the carbon market,” explains Dr. Kevin P. Hoyt, director of UT Forest Resources AgResearch and Education Center.
A forest carbon project is defined by a verifiable process whereby carbon sequestration is quantified, calculated and accounted by standard operating procedures, scientific measurements and financial models over many decades.
Alternatively, companies like the Natural Capital Exchange (NCX) pay landowners to delay harvesting their trees for an agreed period of time. Those companies then sell these carbon credits to businesses that are releasing carbon into the atmosphere, such as Cargill, Shell and Microsoft.
See more: Tennessee Trees Grow Fast, Strong
Who Can Get Involved?
Many private landowners can learn more about carbon market opportunities through the TDA Division of Forestry or UT Extension.
“Landowners can develop a carbon project through industry subject matter experts or forestry consultants, or they can work through several established forest management and certification programs,” Hoyt says.
Carbon sequestration and selling credits is a new opportunity for farmers and landowners, and TDA is providing education and resources.
“Our role is to inform the woodland landowner about opportunities in the marketplace,” says Heather Slayton with the TDA Division of Forestry. “Market incentives encourage them to actively manage their woods, which leads to healthier, more resilient forests. Participation in carbon markets can certainly be a part of that active management.”
While the division plays a role in encouraging the landowner to take advantage of market opportunities that help them manage their land, it is ultimately the private sector where transactions are carried out.
“We strive to provide as much support to help people participate in the carbon market with a plan that best fits their operation,” says Lani Powell, NCX marketing manager.
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What’s in It for Landowners?
NCX is one of many carbon sequestration companies, and each has different agreements and requirements to sell through them. For example, NCX can buy carbon credits with short-term agreements, so landowners aren’t restricted on how they manage their private forest lands.
“Short-term markets are not as lucrative but can help to offset some costs or pay the land taxes for that year,” Slayton says. “Carbon projects are meant to incentivize landowners to keep their property in forests, benefiting the environment.”
NCX and TDA experts both recommend working with a forester or UT Extension specialist to better understand how to integrate carbon sequestration and marketing into a management plan.
Jeff Wright, the landowner key accounts manager for NCX, says many landowners get involved to help mitigate climate change.
“We’re finding many of the landowners we engage with are well aware of climate change, and they want to make a positive impact by retaining those trees on their property,” Wright says.
See more: Protecting Tennessee Trees
Hoyt says carbon sequestration is a great way for farmers and landowners to contribute to the health of our environment.
“Trees store carbon, and even after timber harvesting. That carbon is still stored in the long-term solid wood products produced from the harvested logs, rather than being released into the atmosphere,” says Hoyt. “By sequestering carbon, farmers are promoting sustainability. They even gain better understanding of their land and foster goodwill from the public by reducing climate change.”