Forest Carbon Offsets: Case Studies
Case Study 1
A landowner interested in conserving second-growth forest near Coos Bay, Oregon has the opportunity to purchase an additional 2,500 acres of timberland in a relatively productive site. The predominant species is Douglas fir and the current average age is 50 years. The future long-term management plan will rely on minimal harvests (<250 MBF/year) to improve ecological benefits. Funding for the purchase will include carbon credits, conservation easements, and other ecosystem service payments. All credits calculated for sale are provided in metric tons of carbon dioxide equivalent (tCO2e) (see glossary of terms at below).
The landowner has contracted with a buyer who is willing to pay up front for the first five years of carbon credits at $10 per ton.
|Total Acres||2,500 acres|
|Current standing carbon||225 tCO2e/acre|
|Baseline Average||155 tCO2e/acre|
|Total tCO2e (Year 1)||175,000|
|Carbon Credits after deducting risk buffers (Year 1)||122,000|
|Carbon Credits after deducting risk buffers (Year 2–5)||6,000/year|
|Price per tCO2e||$10|
|Revenue from carbon credit sales (year 1)||$1,220,000|
|Revenue from carbon credit sales (years 2–5)||$240,000|
|SUBTOTAL CARBON REVENUE||$1,460,000|
|Cost of project development and maintenance (Years 1–5)||$250,000|
|TOTAL AVAILABLE FOR PURCHASE||$1,210,000|
Case Study Two
A forest manager in eastern Washington owns and manages over 4,000 acres of forest currently harvested on a traditional rotation (approximately every 50 years), and would like to shift to a longer rotation (approximately every 80 years). There are currently several areas under voluntary conservation reserve and much of the land is ready for harvest at the older age class.
The landowner has negotiated a sale of the first three years of carbon credits at a price of $15/tCO2e.
|Current standing carbon (tCO2e)||77 tCO2e/acre|
|Baseline average (tCO2e)||59 tCO2e/acre|
|Total tCO2e (year 1)||72,000|
|Carbon credits after deducting risk buffers (year 1)||44,000|
|Carbon credits after deducting risk buffers (years 2–3)||1,200/year|
|Price per tCO2e||$15|
|Revenue from carbon credit sales (year 1)||$660,000|
|Revenue from carbon credit sales (years 2–3)||$36,000|
|SUBTOTAL CARBON REVENUE||$696,000|
|Cost of project development and maintenance (years 1–3)||$150,000|
|TOTAL CARBON REVENUE||$546,000|
Forest Carbon Glossary
GHG (Greenhouse Gases) – naturally occurring and man-made gases found in the atmosphere that have been shown to contribute to climate change. The most common include carbon dioxide (CO2), water vapor (H2O), methane (CH4), nitrous oxide (N2O), and ozone (O3).
tCO2e (ton of carbon dioxide equivalent) – a unit used to measure all greenhouse gas contributions to global warming. Different greenhouse gases have varying effects on the climate. To simplify things, carbon offset regulations and protocols convert the potential climate impacts of all greenhouse gases into the equivalent impact of one ton of carbon dioixide.
VER (Voluntary Emissions Reductions) – credits generated by carbon offset projects within a voluntary offset market, usually expressed in terms of tons of carbon dioxide equivalent (tCO2e)
CRT (Carbon Reduction Tons) – carbon credit units produced under the Climate Action Reserve system, equivalent to 1 tCO2e
VCU (Verified Carbon Unit ) – carbon credit units defined and exchanged under the Verified Carbon Standard, equivalent to 1 tCO2e
CCO (California Climate Offsets) – offset credits used for the regulated market in California measured in tCO2e
Standing carbon – the amount of carbon (or tCO2e) in the standing trees of an existing forest.
Risk buffer – a proportion of the total additional tCO2e a project creates that is held in reserve to act as an insurance policy against unforeseen events such as fire, insect outbreaks, or storms that may reduce the total carbon stores.