Forest Carbon: Who’s who in the Forest Carbon Market, Part 2

By Natalia Medina-Irizarry and Dr. Michael Andreu, University of Florida IFAS School of Forest, Fisheries and Geomatics Sciences

 

In Forest Carbon: A Potential Source of Income for Forest Owners, Part 1 (in Florida Land Steward issue 10.3 and online at http://blogs.ifas.ufl.edu/ffgs/2021/09/08/forest-carbon-a-potential-source-of-income-for-forest-owners-part-1/) we introduced the inner workings of the forest carbon market and briefly defined terminology/jargon such as: carbon trading, carbon projects, carbon credits, and the foundational principles. Project developers, registries, standards, and methodologies were also introduced in Part 1 and will be discussed in more detail in this article (Part2). Briefly, project developers help the landowner develop carbon projects, arrange property assessments, and initiate interactions with registries and verifying bodies. While registries, standards, and methodologies offer the regulatory structure required to ensure the credibility of carbon offsets.

Project Developers

Carbon project developers offer carbon programs that streamline the process of carbon project development, registration, and management for the landowner. Landowners will find that the majority of their interactions throughout the lifecycle of a carbon project will be with their project developer. The services offered by project developers, costs, surveying techniques, eligible standards, and methodologies vary for each program. Therefore, landowners should be aware of these differences before making decisions. For instance, some project developers will take on projects at no cost to the landowner. However, their efforts are later compensated through commission from carbon credits developed and sold.

Project developers may be independent organizations or individuals with an expertise or specialization in offset project development. Table 1 compares project developers that can help landowners develop a forest-based carbon project. Note that the Family Forest Carbon Program (FFCP) cannot currently support projects in Florida and are expected to expand into the Southeast in the future. Also, Finite Carbon is rolling out their CORE Carbon program regionally in 2022, beginning with the Southeast.

Third-Party Verifiers vs. Registries

To ensure accountability, carbon projects must be verified by a third-party verifier and registered for tracking purposes. These verifiers are referred to as third-party certifying bodies or third-party verification bodies. Third-party verifiers offer validation, verification, and certification of carbon projects against the standard the project is enrolled under.

Registries are the system where the reporting of credits generated, credit ownership, credit sales, and credit retirement are documented and tracked. Such tracking of carbon projects is required for those who intend to participate in the voluntary and compliance markets because it safeguards carbon credits from being double counted, guaranteeing their credibility. In essence, the registries serve as the library or database that stores every project and transaction that takes place.

The terms ‘third-party verifier’ and ‘registry’ are frequently used interchangeably. Although they serve different functions within the carbon offset industry, the terms overlap in reference because third-party verifiers often have their own registry. For instance, the most recognized third-party verifiers in the U.S. include the American Carbon Registry (https://americancarbonregistry.org/) and Verra (https://verra.org/), and their respective registries are the American Carbon Registry (https://americancarbonregistry.org/how-it-works/registry-reports) and Verra Registry (https://registry.verra.org/).

Validation and Verification Bodies (VVB’s)

Carbon projects must be independently assessed to ensure project activities occur and the project performs as predicted. These independent assessments are carried out by Validation and Verification Bodies (VVB’s). VVB’s are independent companies, often environmental consulting firms, that have been approved and accredited by third-party verifiers to execute the validation and verification of carbon projects. Verification activities differ between project types, but generally involve ongoing monitoring, assessment, and auditing until the project ends.

Carbon Standards

Similar to the Sustainable Forestry Initiative (SFI) standards, carbon standards are developed for the purpose of providing rules and measurement criteria for carbon projects. Additionally, standards define what project success is and terms by which carbon credits must be quantified, monitored, reported, verified, registered, and issued.

Be attentive to the differences between carbon standards as individual components and terminology can vary- slightly complicating the decision-making process. Some of the most recognized standards in the U.S include the American Carbon Registry (ACR) standards, Verified Carbon Standard (VCS) by Verra, and Gold Standard. All three standards may generate carbon credits for both the voluntary and compliance market; keep in mind not all standards do so.

Methodologies (AKA: Protocols)

Methodologies, also known as protocols, are the frameworks prescribed to carbon projects that define the greenhouse gas (GHG) accounting rules and parameters that are required to generate carbon offsets. These rules and parameters are used to determine the eligibility, additionality, and baseline or business-as-usual (BAU) scenario of a carbon project. The most recognized methodologies are established by third-party verifiers for each carbon standards. However, project developers may develop their own methodologies, especially if available methodologies do not suit a particular project. New methodology proposals must be submitted to the carbon project’s corresponding third-party verifier for approval.

Existing forestry methodologies include Improved Forest Management (IFM), Afforestation/ Reforestation, Avoided Ecosystem Conversion, and Avoided Forest Degradation. Both ACR and VCS have several versions of such methodologies pre-approved. The United Nations Clean Development Mechanism (CDM) and the Climate Action Reserve (CAR) are also widely recognized for their development of methodologies for forest-based carbon projects. ACR accepts methodologies developed by the CDM, while VCS accepts methodologies developed by both the CDM and CAR.

We realize this topic can be confusing and we hope this helps to clarify some of the terminology you encounter. As the forest carbon market continues to evolve and expand, we look forward to releasing additional educational resources.

 

Table 1*: Comparison of project developers and the carbon project programs they offer. Some of the information in this table requires contacting the organization directly.

Project Developer Eligible Locations Property
Size
Minimum
Fees Term Length Carbon Standard Property
Assessment
Method
Payment Reoccurrence
Natural Capital
Exchange
Contiguous U.S. None None 1 year VCS (currently seeking
approval)
Remote
sensing
Yearly
Family Forest Carbon Program
By AFF & TNC
Specific counties
in Pennsylvania1
30 acres None 10-20 years VCS Forest Inventory Analysis (FIA) comparison Yearly
CORE Carbon by FiniteCarbon 2 All U.S. states2 40 acres None 40 years ACR Remote sensing Twice a
year
Forest Carbon Works Contiguous U.S.
and southern parts
of AK
40 acres $75
application
fee
40 years ACR Historical aerial photography; FCW Forest Technician Yearly
3GreenTree No geographical restrictions,
depends on forest
type
None Project is fully funded by landowners3 20-40 years VCS or ACR Remote sensing
and field plots
Yearly

1 Future opportunities in the Southeast

2 Rolling out regionally in 2022 beginning with the Southeast, followed by New England and the Lake states. Between the end of 2022 and beginning of 2023 the program is expected to rollout in the Midwest and Southwest.

3 Costs to the landowner/s range from $60,000-$80,000

*Special thanks to Calvin Norman from Pennsylvania State University and Chris Demers from the University of Florida for their input on the table provided.

 

About the authors:

Natalia Medina-Irizarry is Forest Systems Research Assistant, University of Florida IFAS, School of Forest, Fisheries & Geomatics Sciences (SFFGS)

Dr. Michael Andreu is Associate Professor, SFFGS

 

This piece was excerpted from the quarterly Florida Land Steward newsletter, Issue 11.1

Posted

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Posted: February 24, 2022


Category: Conservation, Forests, NATURAL RESOURCES, UF/IFAS Extension
Tags: Forest, Forest Carbon, Forest Resources And Conservation, Forestry, Natural Resource Conservation, Timber, Trees


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