Carbon credits on Minnesota woodlands

April 29, 2007 at 1:07 pm Leave a comment

Family forest owners in Minnesota may be eligible to receive significant carbon credit payments for acres planted or converted to forest after 1990. This page provides information and links about how carbon credits work. More detail about carbon sequestration and storage for specific forest types in Minnesota is available here.

About carbon credits

Global climate change is driven by rising concentrations of carbon dioxide in the atmosphere. Because wood is about 50% carbon, growing trees pull carbon out of the atmosphere. This process is called carbon sequestration. The faster trees grow, the more carbon they pull out of the atmosphere.

In some countries, there are caps or limits on the amount of carbon industrial firms can emit. If an industry is unable to meet its cap, it can purchase the right to emit more carbon on the open market. Markets for carbon credits are now well established in order to meet this need.

Although the US does not currently have a cap and trade regulation in effect, carbon credits are now traded on the Chicago Climate Exchange. Forest owners committed to long-term forest growth can sell carbon credits on these markets. Carbon trading is entirely market based–this is not a government (or other public) subsidy.

Current rates traded on the CCX are variable, but have recently been in the range of $3.00 – $4.50 per metric ton of carbon sequestered. According to growth charts, this translates to an average payment of about $8-15 per acre per year in Minnesota. That varies by timber type and a number of other factors.

Possible barriers

Too good to be true? Maybe. Few if any Minnesota family forest owners currently receive carbon credits. You’ll need very detailed records of your tree planting activities, and will likely need to work closely with a professional forester to prepare your documentation.

In addition, regulations are still being drawn up. Can carbon sequestered by growing forests be counted as carbon offset? How exactly should it be calculated? Some standards are still in development and incomplete.

Carbon credits are promising, but not yet well established in Minnesota. If you have experience with carbon credits for forest land in Minnesota, tell us about it in the comments below.

Learn more

For a detailed overview of carbon credits available to Minnesota woodland owners, download A Landowner’s Guide to Carbon Sequestration Credits.

More detail about carbon sequestration and storage for specific forest types in Minnesota is available here.


 

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Income taxes and Minnesota family forests Minnesota woodland stewardship plans

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About this blog

News and information of interest to Minnesota woodland owners. Sister site to MyMinnesotaWoods.org.

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