Northeast Forest Carbon and Climate Partnership: Forest Carbon Markets

Also known as a carbon credit, this is a certificate that represents the reduction or removal of one metric ton of CO2, or the equivalent amount of other greenhouse gases, for a set amount of time.

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Programs in which multiple forest landowners enroll parcels, and their generated offsets are combined, or pooled, under the management of a carbon offset developer. These programs enable owners of relatively small parcels to participate in voluntary carbon offset markets

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A market-based approach to climate change mitigation, based on the idea that greenhouse gas emissions at one location can be balanced out, or offset, by carbon sequestration and storage at another location. In this framework, a carbon offset buyer who is responsible for greenhouse gas emissions pays someone else to keep greenhouse gases out of the atmosphere. There are two kinds of carbon offset markets: compliance and voluntary.

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Compliance carbon market: A carbon offset market established by a government as part of a regulatory regime that requires certain greenhouse gas emitters, such as power plants and factories, to reduce their emissions over time.

Voluntary carbon market: A carbon offset market in which private entities, as opposed to a government, set the terms of participation and there is no statutory obligation to participate, or for the buyer to reduce emissions over time. Most northeastern landowners who produce carbon offsets participate in a voluntary carbon market

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A specific (typically, site specific) project that is enrolled in a carbon offset market. In compliance with the terms of enrollment, the land manager implements plans to reduce or prevent emissions and/or to increase sequestration and storage.

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The forest carbon project process generally begins with a landowner working with a carbon project developer to evaluate whether a property is eligible and financially viable for enrollment. If eligible, the developer conducts a forest inventory and models future carbon storage under both a baseline management scenario and a proposed project scenario. Carbon credits are generated from the additional carbon retained under the project scenario, which is achieved through management practices such as longer harvest rotations, higher tree retention, or reduced harvest intensity, and these commitments are documented in a forest management plan.

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Forestlands enrolled in a forest carbon offset project can be actively managed for timber and other wood products along with additional goals like improved wildlife habitat or recreational opportunities. In general, forest carbon offset projects are compatible with other forest programs if they do not restrict timber harvests or mandate carbon storage.

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A forester may be able to help a landowner navigate forest carbon offsets, but as this is a new and rapidly changing economic sector, talking to a carbon developer will be the best way to determine if the land is eligible to be enrolled in a carbon offset market. Because there are not many forest carbon projects in the northeast, many foresters and managers do not yet have experience in project facilitation. It is important to note that enrolling in one forest carbon program, even for one year, may lock the landowner into that program or prevent entering another forest carbon program. Diligent research on forest carbon program options and ramifications is highly encouraged.

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