What is the difference between carbon credits and carbon storage?
Carbon credits are emission reductions from projects that reduce, remove or avoid greenhouse gas emissions. They are measurable and variable emission reductions that are related to the amount of carbon stored on their land. Carbon storage is a process that entails capturing carbon from the atmosphere and either be carbon sequestration, carbon capture and storage, CO2 storage, or carbon offsets. Carbon can be stored naturally through vegetation or through geologic processes.
Who buys carbon credits?
Companies and organizations purchase carbon credits to offset their carbon emissions.
How can I judge if my client’s land holds value for carbon?
The best way to judge your client’s land for carbon potential is by using LandGate’s LandApp tool. This tool has all of the data needed to discover the value of your client’s parcel for a potential carbon lease. You will be able to view data showing whether the land is located in dense tree or vegetation locations like forest areas or farmlands.
What does carbon leasing entail for landowners?
Voluntary offset carbon credit programs are designed to promote the sequestration of carbon dioxide from the atmosphere through vegetation and soil health on parcels. Landowners can choose to participate in programs that either restrict or promote certain types of land use operations in order to increase the amount of carbon the parcel can sequester. Landowners would enter a contract with a carbon developer and then adhere to the practices of the contract on their land. If the landowner follows through with those practices, then they receive monetary compensation based on the contract.
How does carbon storage affect the land of a landowner?
Carbon storage doesn’t actually affect the land! The sequestration of carbon means moving CO2 emissions into underground pore space that once contained oil and gas.
How can helping your clients with carbon leasing positively impact your land business?
It offers another way for landowners to keep their land while still making a passive income without any type of invasive building.
Why are LandGate’s valuations higher than the commodity price the carbon credits are being bought by the registries for?
The current carbon market is very inefficient from an end-buyer and end-seller perspective. Many “middle-men” exist in the process which cause the end-seller (landowner) to receive a lower payment than what they would get by going directly to the end-buyer. Landgate uses a purely scientific calculation of how many tons of carbon dioxide each parcel sequesters and uses current market prices to accurately reflect the true value of carbon offset credits.
How many acres are needed to sell carbon credits?
Acreage counts are dependent on the type of carbon credits available on the property. Densely populated timber stands can generate a significant amount of carbon credits on a per acre basis vs areas where the land is arid grassland. Typically, the more precipitation and vegetation that applies to a parcel, would require less acreage. The more arid and sparse vegetation, the more acreage will be required.
What is a deferred carbon credit?
Harvest-deferred carbon credits are essentially for anything harvestable or thinkable. Meaning one of these credits will count for a certain amount of wood that could be harvested or might be harvested later in the year. Instead of harvesting their trees, the landowner would instead be compensated for maintaining their timber stand.
Are carbon credits regulated in the United States?
Carbon credits are transacted in the carbon compliance market while carbon offsets are transacted in the voluntary carbon market. For carbon offsets, there is currently no regulation that mandates companies to purchase them.