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Carbon Leasing Questions Answered for Land Realtors

Aerial photography of green trees with the ocean in the distance

In the evolving landscape of environmental conservation and sustainability, the concept of carbon credits has emerged as a pivotal element, especially for professionals in land real estate. The integration of carbon credit systems into land management and real estate practices is generating many questions from land realtors, who play a crucial role in this new industry. This resource is designed to address common inquiries, providing insights into how carbon credits work, their benefits, and the implications for land realtors. Whether you're a seasoned real estate professional or new to the concept of carbon trading, this post will equip you with the knowledge you need to navigate the carbon credit landscape effectively.

What is the difference between carbon credits and carbon storage?

Carbon storage is a process that entails capturing carbon from the atmosphere. Carbon can be stored naturally through vegetation or through geologic processes. There have been many new scientific developments in the carbon space, such as biochar, that are changing the carbon credit landscape and providing advanced opportunities for carbon sequestration and 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.

Who buys carbon credits?

Carbon credits were devised as a way to reduce carbon emissions, so 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, along with tree type information, soil type data, reforestation potential, and more.

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. Contracts vary depending on the carbon developer and the type of agreement. If the landowner follows through with those practices, then they receive monetary compensation from the carbon developer based on the specifications within the contract.

How does carbon storage affect the land of a landowner?

Carbon storage doesn’t actually impact the land! The sequestration of carbon involves moving CO2 emissions into an open, currently unused 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 development. However, there is an additionality requirement with carbon credits in which developers and buyers of carbon credits are not willing to pay for a landowner for carbon credits if the changes that they would have made to the land would have happened regardless.

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 causes the end-seller (landowner) to receive a lower payment than what they would get by going directly to the end-buyer. Additionally, the value of carbon credits fluctuates constantly based on supply and demand. LandGate uses a proprietary scientific algorithm to calculate how many tons of carbon dioxide any property 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 agreements applicable for 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, because trees sequester more carbon than any other type of vegetation. Generally, the more arid and sparse the vegetation is on the land, the more acreage will be required.

What is a deferred carbon credit?

A harvest deferral carbon credit is an agreement in which a landowner can get paid to not harvest their trees. However, in order to qualify for this type of carbon credit lease, the trees must be at risk of being timbered. Instead of harvesting their trees, the landowner would be compensated for maintaining their trees by delaying their harvest. However, there are many other types of carbon credit agreements that a landowner can qualify for outside of harvest deferral carbon credits.

How can land realtors get the best deal for carbon credits for their clients?

The best way to get the highest carbon lease offer for your clients is to enter the property into a competitive marketplace like LandGate. Numerous energy developers use LandGate's data and marketplace to evaluate and plan new projects. Listing on LandGate is free, and there are no obligations to accept any offers that you receive through a listing:

To discover the carbon credit potential of any U.S. property, subscribe to LandApp for just $10 per month. Access nationwide ownership information, unlimited property reports, and more:


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