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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.

Total Acres 4,000
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.

Our Work

Ecotrust Forests & Ecosystem Services

A Landowner's Guide to Forest Carbon Offsets

 


Learn More

Forestry Balances Profit and Conservation in the Pacific Northwest (by Brent Davies), Solutions magazine, January 2012

"Unexplored Potential of Northwest Forests" by Bettina von Hagen, from Old Growth in a New World (Island Press 2009) 50kb pdf

Emerging Markets for Carbon Stored by Northwest Forests (200kb pdf)

An Ecosystem-Based Forestry Investment Strategy for the Coastal Temperate Rainforests of North America (1.3mb pdf)

Redefining Stewardship: Public Lands and Rural Communities in the Pacific Northwest

Roots of Prosperity: The Pacific Coast Watershed Partnership

Contact

Brent Davies
Vice President, Forests and Ecosystem Services
tel: 503.467.0761
Download vCard Brent Davies CV

Kate Carone
WWRI Program Coordinator
tel: 503.467.0814
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