Forestrycarbon.com – How does this work?

The Chicago Climate Exchange (CCX) is a publicly traded business that provides a market-based mechanism for reducing greenhouse gas emissions.

Carbon trading works like this: major greenhouse gas producers (manufacturers, energy sector, etc) voluntarily participate in the CCX as carbon credit buyers to offset their emissions. The CCX connects these emitters with carbon-storing (or sequestering) projects as carbon credit sellers.

Carbon-storing and sequestering projects can range from methane capture (from landfills or animal farming), to more efficient engineering solutions for coal-burning, to no-till farming and tree planting. The integrity of each of these projects is ensured by a CCX-verifier, and the level of verification varies with the scale of the project.

Forestrycarbon.com seeks to find forest and woodland landowners who qualify for CCX-based carbon credits. We’d like to help you enroll your lands as a CCX carbon offset project.

Forestrycarbon.com provides brokerage services to enroll individual forestland owners like you so that you may gain access to the market. We help you enroll your qualifying lands in the program, ensure that your wooded acres conform to market standards. The role of the broker is to aggregate, or pull together, enough small parcels so that these can be traded as large blocks on the CCX.

At present, the only qualifying forestlands include those planted since 1990 or lands that have been reforested through natural regeneration since 1990. If you qualify, the amount of your payment would be dependent on the species and age of your forest stands and the price of carbon credits at the time your land is enrolled. Forest landowners are paid through a formula based on species and age of their timber stand the price of carbon on the CCX at the time your acreage is enrolled.

You will be paid once per year and the price will fluctuate depending on the price of carbon. You will receive annual payments at 70% of the value of the project (see figure). Every year 10% of the project value will be paid out to the broker, who organizes and presents your contract to CCX. Another 20% of the project credits will be set aside in a reserve pool – in case of insect attack, wildfire, hurricanes, etc. This reserve value belongs to the landowner, and if the contract is fulfilled at 2010 with no acreage losses, the full value of the annual 20% reserve will be paid to the contract holder at that time.

To enroll in a carbon credit contract for your land, the following materials are needed:

• Plat maps to document ownership of a given tract of land, including the legal land description of the tract (township, range, etc.).
• A forest management or stewardship plan -- documents for the Tree Farm System or Conservation Reserve Program are sufficient. (If you do not have a forest management or stewardship plan, one can be obtained by contacting your local extension agent or service forester.)
• Documentation of the number of trees planted (such as a receipt from a nursery or cooperating forester).