Carbon stock valuation within forestland has emerged as a promising new method of incentivizing conservation efforts around the world. In 2016, the carbon market in the United States alone transacted 10 million MtCO2e (Metric tons of carbon dioxide equivalent) for an estimated $28 million1. Given that the United States has 11.5 million square miles of forest, the potential growth of this market is enormous2. Carbon valuation in forest management can help to draw attention to the importance of preserving carbon stocks in order to mitigate climate change and encourage landowners to protect their forestland for future generations.
You can sell your credits in two ways. There are numerous programs, entities, standards, and protocols in the voluntary offset market. Buyers in the voluntary market are typically businesses, non-governmental organizations (NGOs), and individuals seeking to offset emissions in order to fulfill personal or corporate social responsibility agendas and/or market and social pressures.
Verified or Voluntary Emissions Reductions are offsets generated through voluntary markets (VERs). VER offsets, as opposed to mandatory compliance markets, have lower transaction costs. The goals and services provided by voluntary market standards and protocols vary significantly. Other institutions, standards, and criteria offer a variety of services for designing, screening, certifying, or registering offsets, such as the Green-e Climate Program, which certifies carbon offset retailers and ensures that their marketing claims are true.
Mandatory systems (also known as compliance markets) require regulated emission sources to meet greenhouse gas emission reduction targets under national, regional, or provincial law. The Regional Greenhouse Gas Initiative (RGGI), launched by ten Northeast states, became the first cap-and-trade emission trading scheme to reduce carbon dioxide (CO2) emissions from the power sector in 2009.
The forestry sector of the carbon market is distinct due to the wide range of methodologies and criteria used in each market. The markets differ significantly, which this guide aims to address so that you can select the one that best suits the forestry you want to do or are doing.