Frequently Asked Questions

• What is Woodlands Carbon?

  Woodlands Carbon aggregates and trades sequestered carbon credits from certified family woodland owners in the Western United States. The aim is to create yearly revenue for family woodland owners from carbon markets. Woodlands Carbon is a C Corporation, established in 2008 by the Oregon Small Woodlands Association (OSWA) in partnership with the American Forest Foundation (AFF).

• What is “sequestered carbon”?

  Carbon that has been removed from the atmosphere and stored long-term. Trees capture carbon naturally through photosynthesis. By removing carbon dioxide and other “greenhouse gases” from the atmosphere, trees help to reduce or reverse global warming.

• So, I can get paid for growing trees?

  A: Yes; Both exchange and Over the Counter (OTC) markets recognizes certified managed forests as a legitimate method for long-term storage of carbon. Certified managed forest carbon credits are accrued annually; you are selling the annual increase in carbon sequestered by your forest (the volume growth), and guaranteeing that this amount will remains sequestered for the length of the contract between you and Woodlands Carbon.

• Q: What am I committing to?

  The current base contracts for Woodlands Carbon run through June 30th 2013. You are also committing that your woodland remains certified for 15 years after the date of enrollment. Other contracts are available based upon common vales between sellers and buyers.

• Q: Why should I trade with Woodlands Carbon rather that doing it myself?

  A: Woodlands Carbon plays the role of an aggregator to make economies of scale work for the exchange and OTC accounting and auditing requirements. Most traders buy and sell credits in 10,000 metric ton blocks, OTC markets can require blocks of 50,000 tons and above. Woodlands Carbon aggregates (bundles) woodland owners’ yearly carbon growth together into carbon credit pools and then trades the pools on the open market. By pooling owners together, Woodlands Carbon creates access to exchange and OTC markets. By pooling resources we are also able to employ experts in the fields of forestry and commodity trading, putting us in the best position to succeed in generating additional income for forest landowners.

• Q: How many tons of carbon will my forest sequester?

  A: On average the western forests will sequester 1.5 to 10 metric tons per acre per year; the exact number will come from the data generated by your inventory.

• Q: So I can trade up to 10 tons per acre per year?

  Q: So I can trade up to 10 tons per acre per year? A: Not exactly. You can realistically trade up to 80% of the sequestered carbon annually. 100% Actual amount of carbon removed from atmosphere annually by forest - 0- 20% maximum error calculated into the inventory. - 20% mandatory reserve against catastrophic loss (can be recaptured at end of contract) 80% Maximum Sequestered Carbon available to trade.

• Q: How often?

  A: Credits are accrued annually, and are based on the calendar year. As they are commodities they might not be sold immediately, but held until market conditions are more favorable. Woodlands Carbon pays the landowner within 32 days of when credits are traded.

• Q: How much?

  A: On open market exchanges that trades carbon just like any other commodity; the market sets the price. In 2008 carbon credits traded on the CCX ranged from a high of $7.50 to a low of $1.20 per ton. Woodlands Carbon also plans to sell directly to socially responsibly individuals and companies looking to support family woodlands that store carbon. This type of trade is know as over the counter (OTC) A similar project in Michigan returned forest owners an average of $8 per ton in and OTC trade. On other OTC trades the value has been as high as $15 ton. These trades are based upon longer contract lengths and a different accounting system.

• Q: Can I still sell timber and cut firewood?

  A: Harvests do not need to take place every year, and as long as growth exceeds harvest levels you can sell credits annually. Any removals (either commercial or non-commercial) have to be accounted for and affected stands re-inventoried. You will also want to retain the rights to the carbon in any products sold. This can be done by a simple stipulation in your timber sales contract.

• Q: Can I enroll just a portion of my forest to start with?

  A: No. Our base contract requires that all eligible properties of an ownership must be enrolled. This ensures that the market isn’t artificially inflated by enrolling only the best growing stands or areas that are not scheduled for harvesting for many years.

• Q: What if I change my mind after I enroll?

  A: You will have a contract with Woodlands Carbon in order to enroll in the program. The contract contains specific penalties for non-compliance. This includes willful breach of contract, failure to adhere to a management plan, non-conformance to certification standards, and changing to non-forest use.

• Q: What if insects, disease, or natural disasters decimate the stand and kill the trees?

  A: Each pool of carbon sold represents 60% - 80% of the total amount sequestered. 20% is insurance against catastrophic loss. Most owners will also need to remove up to 20% maximum of their total due to deviations with in their inventory. As long as the loss is in no way due to deliberate actions or negligence on your part, the liability for loss is limited to that 20% reserve. If the reserve is not used at the end of the market period, it becomes part of the pool and it can be sold outright.

• Q: What do I need to get started?

  A: An accurate, recent inventory of the entire property including trees down to the 2 inch diameter class (conducted by an individual who has attended a Woodlands Carbon Inventory workshop); a forest management plan that meets the standard for and enrollment in the American Tree Farm System; membership in the Oregon Small Woodlands Association or the equivalent industry trade association for the state the property is located; and willingness to adhere to a 15 year certified management commitment once enrolled.

• Q: What does it cost to get started?

  A: You may need to re-inventory your entire property to meet the standards for enrollment; Woodlands Carbon has a revolving loan fund available to help cover this cost, and can deduct the amount from your shares of carbon sales leaving minimal or no out of pocket expenses. If you are a Certified Tree Farm or your forest management plan meets the standards of the American Tree Farm System, there are no costs associated with certification. OSWA membership for forest owners is a sliding scale based on acres owned; the current annual dues for a landowner with 70 acres or more is $135, with those owning less than 70 acres paying $85. Woodlands Carbon is developing inventory requirements to help landowners and consultant foresters establish your “carbon baseline” from both current and new cruises. The requirements will be available soon from Woodlands Carbon and will be used to calculate the amount of carbon being stored in your trees. Woodlands Carbon is establishing low cost loans available to help pay new inventories. Loans will only be repaid as carbon is sold at a profit so landowners do not have to risk an out of pocket expense for a new cruise.

• Q: How much does Woodlands Carbon charge for services?

  A: Woodlands Carbon’s commission is a percentage based on sales includes all accounting, auditing, and trading fees. The landowner may be responsible for additional costs for verification and registration.

• Q: How Woodlands Carbon fits into the market?

  Woodlands Carbon will sell the carbon credits from family woodlands in two main ways. 1) Via the Chicago Climate Exchange (CCX), North America’s only voluntary cap and trade system for green house gas emissions. CCX pays landowners for the carbon that is stored in the daily practice of sustainable forest management and harvested wood products. 2) Over the Counter (OTC) directly to companies and individuals looking to offset their carbon footprint.

• Q: OK I’m interested … what should I do next?

  A: Landowners who are thinking about carbon markets should: 1) Develop or Update your Forest Management Plan: Have clear objectives. Link your style of management to the desire to improve the carbon sequestration and storage of your forest. 2) Get Certified: Most voluntary schemes require sustainable forest management certification. Both individual and group American Tree Farm System certification is now recognized. 3) Attend a “Woodlands Carbon” workshop in 2009: To help you assess the potential for your family forest to earn yearly revenue from carbon credits and what that commitment means to you in the future, Woodlands Carbon will be hosting a number of workshops in 2009.

• How does this program help address climate change?

  Burning fossil fuel releases carbon dioxide (CO2) into the atmosphere, which is generally acknowledged as contributing to global warming. The unique role of oil as the main source of transportation fuel makes reducing CO2 emissions a difficult problem; in theory we can neutralize CO2 emissions by techniques such as carbon sequestration. Carbon sequestration is the storage of carbon dioxide captured from the atmosphere in a solid material through biological or physical processes. Family forests are carbon stores, and they are CO2 sinks when they are increasing in density or area. The Intergovernmental Panel on Climate Change (IPCC) concluded that “a sustainable forest management strategy aimed at maintaining or increasing forest carbon stocks, while producing an annual sustained yield of timber fibre or energy from the forest, will generate the largest sustained mitigation benefit.” IPCC is a scientific intergovernmental body tasked to evaluate the risk of climate change caused by human activity. In order to assure credibility and demonstrate carbon sequestration is taking place, landowners will be required to conduct an inventory of their carbon, based upon inventory guidelines and procedures. Over the next 18 months Woodlands Carbon is hosting a number of workshops for landowners and consultant foresters to introduce both the inventory guidelines and procedures and the landowner contract. Woodlands Carbon is also in the process of recruiting eligible forests to pool into an offset project. We will restrict the pool to projects that have the best opportunity of success. Mike Gaudern, of Woodlands Carbon was delighted with the response to two initial workshops held in Benton and Washington counties in July 2009. “It appears that we have interest from landowners with woodlands of all sizes and types. We are looking forward to assembling our first pool for sale this fall. “The price of carbon is very volatile at present so we are looking at pool assembly costs as we put pools together, setting a target price and searching for the right buyer.” “Younger stands of less complexity and fast growing species seem to be the most cost effective to inventory. But with the stratification and ability to pool landowners together we think that all stands have a chance if we see prices rise to where economists have suggested once a national cap and trade system is implemented”