Forestry for Carbon Credits

[slowp]

Today I went to a seminar on using forest lands for carbon credits. I'm a bit confused. Apparently, here in the PNW, if you own 10 or more acres of forest land, are a certified tree farm, are a member of the Family Farm Forestry Assc. (here in WA) and also are certified as a sustainable forest, you can sign a contract and try to earn money selling carbon credits. They pay by the carbon ton and there is a carbon exchange. It is a lot like dealing in stocks.

Prior to the election, prices were high. Then they crashed. The speaker was pretty up front, he said it was quite a gamble. His organization would enter into contracts with forest owners and then they'd sell the credits on the market when the price was right. He showed that right now you'd be in the negative earnings if they sold your credits. Their contracts go for 3 years in which you are a bit limited in what you can do to your trees harvest wise.

They will give a no interest loan to help pay for an inventory (cruise) of the land.

It is bizarre and my head is spinning. I don't have enough land, and it doesn't sound like too good a deal unless the price went up and you had a lot of acreage. They also won't buy credits that are in riparian areas, are currently restricted due to wildlife, or will be heavily harvested in the next three years.

I probably shouldn't be explaining this since I am not an expert, but it might be worth some research to youse guys.

I offered to cruise timber for a friend if I got paid with a beer or two and a hot dog. The cruise has to have an error of 10% and they seem to favor a variable plot cruise, with count plots included. That part, I could follow.

There's no worrying about grade or defect. For this particular outfit, you would record everything 1.6 inches diameter or bigger.

It is a strange new world. I guess this would be a way to maybe make a little money while waiting for the lumber market to recover.

 

[woodsrunner]

It does seem crazy

Carbon credit prices actually crashed way before the election. Also you have to remember what the landowner is marketing is sequestered carbon not timber or lumber. Private forest landowners and industrial forest landowners already provide alot of "ecosystems services" to society for free. Why not get payed for some of it? It does seem strange, but, I look at like this: Markets and products are a constantly evolving universe. Always be prepared to think outside the box and evolve with market conditions. If I can make money on my timber land by selling carbon credits, I certainly should be at least carefully considering that strategy. I don't know if the carbon market will really evolve to be a financial boon for landowners in the U.S. or not but in Europe about 18 to 24 months ago prices for carbon credits were pretty lucrative. I haven't kept up with it lately, need to get back to it to see what the market in Kentucky is doing right now. (Different aggregators do have different price structures)

Scott

 

[floyd]

I signed up at NCRS office yrs ago...it never went anywhere.

I did not pursue it either. I soured on the NCRS after the local mucky mucky decided he would pay me 1/2 of the $ assigned to me for a pre-commercial thin.

Don't know if he is still the mucky muck or not. I no longer darken their door.

 

[slowp]

European prices are higher than here. $25 a metric ton. But the guy said they don't include forest land. He said that is changing and forest is soon to be included.

He called what you'd get here, egg money. He kept mentioning $8 a ton, and I guess that is when their company thinks it would be profitable to sell.

 

[bullbuck]

just as long as they promise a bailout for my stock,im in!loltoo bad i only own 8 trees,soon to be 4 trees

 

[RRSsawshop]

Yea ,they are pushing this BIG around here for plain farm land too!!! IT,S really hard to understand IMO.LOTS of :spam:

 

[2dogs]

At SFO there is a booth or a vending machine where passengers who feel guilty about traveling by jet can by carbon credits prior to boarding. What a load of horse patooties! I hate the prevalent PC thinking that is being pushed like dope these days. Even worse though are those who are blaming the Indians of 100-500 years ago for all the prolems we are seing in the west, esp California.

 

[Gologit]

Carbon credit prices actually crashed way before the election. Also you have to remember what the landowner is marketing is sequestered carbon not timber or lumber. Private forest landowners and industrial forest landowners already provide alot of "ecosystems services" to society for free. Why not get payed for some of it? It does seem strange, but, I look at like this: Markets and products are a constantly evolving universe. Always be prepared to think outside the box and evolve with market conditions. If I can make money on my timber land by selling carbon credits, I certainly should be at least carefully considering that strategy. I don't know if the carbon market will really evolve to be a financial boon for landowners in the U.S. or not but in Europe about 18 to 24 months ago prices for carbon credits were pretty lucrative. I haven't kept up with it lately, need to get back to it to see what the market in Kentucky is doing right now. (Different aggregators do have different price structures)

Scott

Great post. Now...in English,please, for us neanderthal knuckledragging timberbeast types. Thanks.

 

[bullbuck]

At SFO there is a booth or a vending machine where passengers who feel guilty about traveling by jet can by carbon credits prior to boarding. What a load of horse patooties! I hate the prevalent PC thinking that is being pushed like dope these days. Even worse though are those who are blaming the Indians of 100-500 years ago for all the prolems we are seing in the west, esp California.

blaming the natives huh?i am curious,what are some of the issues?

 

[woodsrunner]

Great post. Now...in English,please, for us neanderthal knuckledragging timberbeast types. Thanks.

I'll try.

Carbon credits are traded on the Chicago Climate Exchange (much like the Chicago Board of Trade). Individuals aren't allowed to sell their sequestered carbon so you have to go thru an aggregator. Their are numerous aggregators around the country (Farm Bureau, MACED, etc). These are generally regional organizations. They perform the certifications thru a 3rd party and enter into a contractual agreement with the landowner to market the sequestered carbon.
The land owner is the individual who is responsible for assuring the requirements of the contract are met and who receives payment. The credits are sold to organizations to offset their carbon emissions for whatever line of business they happen to be in.
It is all very new wave, tree huggin sort of stuff.

As landowners we are continually required to follow all sorts of regulations (BMP's, etc.) that cost the forest landowner money. Some of the results of those regulations are improved wildlife habitat, increased air quality, greatly increased water quality, etc. Forest lands also provide recreation for the population and timber products. Most of these benefits to society are provided by the landowner at no cost. These societal benefits are called ecosystems services. There is a line of thought today among agricultural and forest land owners and others that landowners should get some compensation for the cost of following these mandates which in turn provide all of these benefits to society at large. (Spotted owls, re-introduced elk populations, clean water and air, etc.)

Carbon credit trading is one of those compensation things in my opinion.
I grow trees. IF this greenhouse gas crap is real and I'm playing a role in cleaning up societies mess on this issue maybe I should get some compensation for sequestering the carbon that Arnold has been spewing out of his Hummer.

I myself still have some qualms about the whole thing, but, I will play the game if it makes sense to do so financially. It is just one more option for marketing the forest products I and my family produce on our timber land.

Scott

 

[Gologit]

Thanks Scott

This might be worth looking into. If you're growing trees I'm sure you're well aware of the low profit margins involved. Anything that will help offset this is worth investigating.
Like most loggers I'm wary of third party intervention and government involvement in anything that I do. There's already way too much of it that we deal with on a continual basis. Most of it costs us money. Lots of money.
If there's a way to retrieve some of that money I'd be interested in learning more about it. I'm a long way from being sold on the idea but some kind of remedial action is necessary.

 

[restoman]

Even the little bit of money the landowner could make, I really really do not think this is a good idea. Where exactly is this credit system going to take us? It's just going to make life more expensive.

 

[restoman]

Oh... and not make the air any cleaner. Beruaucrats and liberal politicians are just dreaming up ways to steal from us.

 

[slowp]

This might be worth looking into. If you're growing trees I'm sure you're well aware of the low profit margins involved. Anything that will help offset this is worth investigating.
Like most loggers I'm wary of third party intervention and government involvement in anything that I do. There's already way too much of it that we deal with on a continual basis. Most of it costs us money. Lots of money.
If there's a way to retrieve some of that money I'd be interested in learning more about it. I'm a long way from being sold on the idea but some kind of remedial action is necessary.

Oregon and Washington are similar and have similar rules. From what little I understood, California, as usual, has different ways. You might get your unloggable habitat included, unlike us. But you live to far for me to go cruise for a hotdog and beer.

 

[hammerlogging]

Well, correct me if I'm wrong, but a regenerated clearcut is going to sequester more tons/acre/yr carbon than a mature stand. So, active forest management is not excluded at all. Plus, when we harvest, that sequestered carbon remains locked up as lumber, atleast till its burned or rots one day, but at least for the short term.

I think it may be an opportunity to keep more land actively managed, and there are opportunities to take this to our (loggers and associated services) advantage. But then again, I could just be a tree slammin pinko commie.

 

[2dogs]

blaming the natives huh?i am curious,what are some of the issues?

I'll give a full answer in the next day or two when I have more time. Right now I'm working on Cheer Leading and Boy Scout stuff. That's for two different kids!

The short answer is this, first off Indians are illegal aliens who came to California uninvited. They are called first settlers. Before they, the carnivorous first settlers, came here the deer and the elk and the fish played all day in the forest prime evil. The first settlers showed up and the blood began to spill. The deer and the elk and the fish now had to hide from the two legged killers called man.

Second those two legged beasts began a pattern of burning out the understory for their own needs such as creating killing fields and growing their crops. The results of their management by fire resulted in a California that was open and beautiful to more and more settlers. Those new settlers wore pants and rode horses and carried diseases. Later they switched to cars and dug for gold and spoke with an Austrian accent. California is in such bad shpe because the first settlers caused California, now called Collyfornia, to look un-naturally beautiful and attractive.

BTW I made up the part about the accent but all the rest is true. We have a University here so we are on the cutting edge of reality. The students' beliefs are shouted at us in the local fish wrappers.

 

[Gologit]

Oregon and Washington are similar and have similar rules. From what little I understood, California, as usual, has different ways. You might get your unloggable habitat included, unlike us. But you live to far for me to go cruise for a hotdog and beer.

Two hotdogs? Two beers? I'm willing to even go as high as three of each for a good cruise.

 

[slowp]

Well, correct me if I'm wrong, but a regenerated clearcut is going to sequester more tons/acre/yr carbon than a mature stand. So, active forest management is not excluded at all. Plus, when we harvest, that sequestered carbon remains locked up as lumber, atleast till its burned or rots one day, but at least for the short term.

I think it may be an opportunity to keep more land actively managed, and there are opportunities to take this to our (loggers and associated services) advantage. But then again, I could just be a tree slammin pinko commie.

Active forest management is OK, but not too much. I'm talking harvest. This is the part I didn't understand. There is a baseline that you mustn't go below.
What I did understand is if the lumber market skyrocketed, and you were under contract for carbon credits, if you cut more than your baseline, you are in trouble. He said, "We will come after you." You could cut some, but not past whatever the baseline? was.

I did enjoy learning that wood products store carbon. I can throw that fact at the misinformed people now.

 

[Gologit]

.
What I did understand is if the lumber market skyrocketed, and you were under contract for carbon credits, if you cut more than your baseline, you are in trouble. He said, "We will come after you." You could cut some, but not past whatever the baseline? was.

I don't think I like the sound of that.

 

[slowp]

I don't think I like the sound of that.

My Bad, You are also required to have a management plan before making a deal, so there aren't any sudden surprises.

We confused the guy with questions about new rules or finding a marbled murrelet tree, etc. He said they needed to figure that out.