March 3rd, 2009

A recent article on the Cleantech blog website (www.cleantechblog.com) by David Niebauer provides a thorough discussion of the forestry element of the coming carbon credit market. Let me summarize.

There seems to be little doubt that with the new administration, carbon offsets will soon become mandatory. That issue can be discussed in a different forum, but our interest lies in the standards by which forestry projects will be evaluated, measured and priced, including afforestation and reforestation.

Additionality For a project to be additional, the funds generated by the sale of carbon credits must be critical to the project’s viability rather than simply a means for the developer to enhance financial returns.

Verification Use of third parties to validate, monitor and register carbon credits. The process adds cost both initially, then also as a charge per ton of $.30 to $.50.

Socio-economic and Environmental Benefits Does the project provide jobs, recreation, biodiversity, aesthetics and improved land use? Forestry projects score high marks in this category in comparison to some offset projects like landfill methane capture.

Permanence A measure of risk, since forests can be destroyed (fire, tree rotting) which must be accounted for using credit set-asides or even insurance.

Another post will discuss the pricing of credits and the impact the recent collapse in the European market may have on this, but one aspect of our emerging commitment to stop global warming.

As always, I welcome your comments.

Posted in Carbon Offsets, Certification, Forestation |

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