COLUMBIA, S.C. – Carbon credits are trading on Wall Street and South Carolina forest owners are learning how to use these credits to generate new revenue streams while helping slow climate change.
Forest landowners recently met with experts from the Clemson University Cooperative Extension Service and others at Clemson’s Sandhill Research and Education Center to learn how to benefit from the carbon market. Marzieh Motallebi, an assistant professor at Clemson’s Belle W. Baruch Institute of Coastal Ecology and Forest Science who organized the workshop, said the carbon market could be lucrative for forest landowners.
“We want to introduce forest landowners to some carbon market successes and explain how they can benefit from the carbon market as well,” Motallebi said.
The workshop, funded by the South Carolina Natural Resources Conservation Service, focused on carbon offsets trading and how this mechanism can help limit greenhouse gas emissions. Carbon dioxide (CO2) is a greenhouse gas released from such activities as burning fossil fuels or natural processes, such as plant respiration and volcanic eruptions. Respiration is the process by which plants use oxygen and produce carbon dioxide. The U.S. Geological Survey reports the world’s volcanoes, both on land and undersea, generate about 200 million tons of carbon dioxide each year.
Forests help control greenhouse emissions by sequestering carbon in trees, grasses and other plants through photosynthesis. The absorption of carbon dioxide by trees helps eliminate the amount of carbon dioxide in the air. Scientists believe if carbon dioxide levels in the air become too high, the Earth’s temperatures will rise.
“We want to help South Carolina residents learn how they can be successful and make money by carbon trading,” Motallebi said.
Forests and the carbon offset market
The Climate Action Reserve was created in California in 2001 to address climate change. Sarah Wescott from the Reserve was at the workshop to discuss the Carbon Offset Compliance Market and the Voluntary Market, as well as the role of forestry in carbon market. The Compliance Market is mandated by the government. Voluntary Carbon Markets are markets in which citizens, corporations and others voluntarily buy carbon offsets from projects that reduce emissions through forests, renewable energy and other means.
“Credits are issued for activities that go above and beyond the norm,” Wescott said. “These activities include activities such as creating wind farms and planting trees or preserving forests.”
Prices are usually higher and steadier in the Compliance Market, Wescott said. The value of each offset credit is based on market dynamics and was worth about $10 on the day of the meeting.
Anyone considering participation in the carbon market should do their research or work with people who know the market. Wescott said the Climate Action Reserve provides information for anyone who is interested in or considering a carbon project. For more information, go to www.climateactionreserve.org. The U.S. Forest Service also has information about Forests and Carbon Storage at www.fs.usda.gov. More information can be accessed by conducting an Internet search for forests and carbon storage.
South Carolina success stories
Carbon offset projects have proven successful in South Carolina. Michael Dawson, center director and sanctuary manager of the South Carolina Audubon Society’s Francis Beidler Forest, talked about how an improved forest management project has been used at the forest to register more than 450,000 metric tons of carbon credits with California’s cap and trade program since 2011. One metric ton equals 1.102 U.S. tons.
“We have netted close to $3.5 million from carbon offset sales,” said Dawson of the Beidler Forest project, which is handled by San Francisco-based company Bluesource. “This money goes into our endowment fund and generates revenue to manage the sanctuary in perpetuity. It has been wildly successful.”
In addition to improved forest management projects, carbon project developers also work on urban forest projects, reforestation and avoided conversion projects. Hunter Parks of Green Assets, a North Carolina company, talked about an 8,300-acre tract of land in South Carolina that benefits from an avoided conversion project. This land has been successfully registered under California Carbon Market and the owners have sold its credits.
“This was a pine plantation and mixed hardwoods project,” Parks said. “In the first 10 years, this project produced about 1.1 million metric tons of offsets and will continue to produce about 30,000 metric tons of offsets annually after year 10. This is a very typical project – typical land-type and forest-type – here in South Carolina.”
The rate of sequestration depends on characteristics of the forest, such as species, climate, age of the trees, management practices and so on, Wescott said.
“Every tree needs carbon dioxide to grow,” she said. “So even if a tree is not suitable for the timber market, it is good for the carbon market.”
The decision to put land in a carbon offset project is a decision that landowners should think long and hard about, Parks said. Carbon offset projects require a 100-year commitment from landowners.
“You have to be sure this is what you want to do before you do it,” Parks said. “Once you agree to use your land as a carbon offset project, this land is tied to that project for 100 years.”
Sheldon Ray is a small-forest landowner who lives in Aiken and has land in Williston. Ray, who is considering implementing a carbon offset project, has concerns about the 100-year commitment landowners must make before entering in to such a project.
“One hundred years is a long time,” Ray said. “There’s a lot to consider, such as how will this commitment be passed down and affect other generations? I also have to think about if a need (for carbon offsets) will exist in the future. In addition, I would like to see funding provided to help defray some of the startup costs. There are a lot of questions I need answers for before I can make a concrete decision.”
Ray and others can get answers to their questions when Clemson has future meetings to explain how forest landowners can benefit from the carbon market. A similar meeting will be held in 2019, Motallebi said. Date, time and location will be announced.