Various Private and Nonprofit Entities
Choosing a Marketplace for Carbon Trade
No one single program deals with carbon offset credits. One branch of the carbon market is the compliance market where carbon emitters are required to offset their emissions by local, state, federal, or international policy. The other branch of the carbon market is the voluntary market where individuals and businesses volunteer to purchase carbon offsets in order to reduce their greenhouse gas emission impacts. There are several marketplaces (often called exchanges) for buyers and sellers of carbon offsets and credits.
Often large tracts of land (1,000 acres or more) are needed to generate profit and contracts of 50 to 100 years may be required to participate in the regulatory markets where there is the greatest price per credit. In both regulatory and voluntary markets, eligibility for participating in an exchange varies based on the carbon offset protocols accepted at the exchange. Currently carbon offset protocols exist for wetlands (sometimes called blue carbon) forest lands, and grasslands.
Project Feasibility
The first step in developing a carbon project is to conduct a feasibility study to determine if the land and owner’s management goals will result in a successful carbon sequestration project. With a favorable feasibility study, the owner must determine what carbon credit protocol is appropriate. An initial inventory on the project area is needed, including time elapsed scenarios and business models.
Carbon Project Verification and Accreditation
Once the preliminary studies have been done, a project document must be developed and verified by a third party accredited in carbon planning, modeling, and estimates. After verification of the project document, the carbon credits can be registered and marketed on the exchange.
Getting Project Help from a Third Party
Project development costs may be high and take time to generate income. Given the technical nature of this process, landowners may want to engage a carbon credit developer to plan and implement the carbon project. These companies offer protocol development, modeling, and implementation, and may have financial partners to implement the project costs. Some non-profits, such as Ducks Unlimited, maintain programs that assist landowner in taking advantage of carbon markets.
Carbon project aggregators manage multiple small carbon projects as part of a larger project to reduce overall cost of project development. Carbon aggregators may be a company or government program and can be a viable option for owners of smaller land parcels.
Getting Started
- Consider your management goals and long-term objectives.
- Research the science behind carbon sequestration and protocols.
- Consult your financial advisor about your plans.
- Determine whether you want to pursue a carbon sequestration project independently or through a carbon credit developer.
- If you will be using a carbon project developer, contact the carbon development companies of your choice for a consultation.
- The Private Landowner Network hosts a list of carbon credit service providers that can be searched by zip code. Select “Carbon Credits and Sequestration” in the Search menu and enter your zip code where provided. Both project developers and third party offset verification experts are listed at this resource.
- If you are not using a carbon project developer, review the information in the guide “Engaging Western Landowners in Climate Change Mitigation: A Guide to Carbon-Oriented Forest and Range Management and Carbon Market Opportunities” published by USDA Forest Service. The Texas A&M Forest Service and the Natural Resource Conservation Service both provide technical assistance for assessing project feasibility, the first step to starting the process on your own. The Ecosystem Marketplace offers online guides on building carbon projects.