A Potential Non-timber Source of Income: Carbon Payments SILVIATERRA - University of Arkansas at Monticello
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SILVIATERRA
A Potential Non-timbe r Source of Income :
Carbon Payme nts
NCAPX 20 21C
May 26 20 21
US South Forestrywww.fore stryimpa cts.ne t ● $251billion in total e conomic output ● More than 1.1 million jobs ● $53.9 billion in labor income ● $14 billion in e xports ● 20 9 million acre s of timbe rlands ● Ove r 5 million private fore st landowne rs ● 57% of timbe r harve st volume in US
Forest Landowners in Arkansas
Forest Landowners Association:
● 15 million acre s private fore sts
● Growth is 2X more wood than harve ste d
● $1.5B salarie s and wage s
● Private fore sts capture e missions of 2.6 million cars annually
● $30 B impact on Arkansas e conomy
● Fore stry supports 64,0 0 0 jobs
Carbon Fore stry Proje cts:
● Be gan in e arly 1990 s
● Some e arly failure s and some e arly succe ss
● Bottom line – 50 % of dry we ight of wood is carbon
● Fore st landowne rs can be paid for carbon capture in standing
tre e s as this will re duce some impacts from climate change
Natural Climate Solutions Current forest carbon efforts: ● California Air Re source Board (CARB) ● Affore station and re fore station (AFF & TNC) ● Wood base d construction – lumbe r, CLT, mass timbe r ● Re duce d impact logging ● Re duction in de fore station REDD+ ● Harve st de fe rral Future natural climate solutions: ● Wate r quality and quantity ● Fore st he alth ● Wildlife habitat ● Re duction in fire risk ● Endange re d spe cie s habitats ● Invasive spe cie s
Definitions Additionality : Business as usual (BAU) does not create real climate impact. Forest carbon capture above BAU is the additional in additionality. Leakage: This occurs when harvesting activity is “leaking” from areas of restricted harvesting onto surrounding forests. The solution to leakage is to provide every land owner and every acre with access to forest carbon programs. Permanence: We use the term durable which is an impact that lasts as long as the purchaser chooses. One ton of carbon captured for 100 years has same climate impact as 17 tons captured for one year. Doing more sooner is > doing less later.
Forest carbon buyers requirements Immediate: ● Little de lay be twe e n action and impact ● Climate impact in this de cade ● Attainme nt of durable impact ● Support local communitie s Scalable : ● Ecological capacity ● Low barrie r to participation for all landowne rs ● Empowe r landowne rs with small holdings Efficie nt: ● Low pre se nt cost to pre se nt be ne fit ● Finds lowe st cost carbon on landscape
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SILVIATERRA
The Natural Capital Exchange (NCAPX)
NCAPX 20 21CAgenda Overview: ● The story of SilviaTe rra ● Natural Capital Exchange (NCAPX) ● What make s NCAPX unique ? Fre que ntly aske d que stions: ● How much might a landowne r ge t paid? ● What are le ngth and obligations of contract? ● Othe r FAQs
The story of SilviaTerra
● Co-founde d in 20 10 by Zack Parisa and
Max Nova at Yale School of Fore stry.
● Initial e mphasis on “pre cision fore stry”
to he lp large landowne rs improve fore st
manage me nt.
● In 20 18 we partne re d with Microsoft to
de ve lop Base map, the first e ve r high
re solution map of the contiguous US.
● Base map is update d annually. We
me asure e ve ry acre e ve ry ye arNatural Capital Exchange (NCAPX)
● Our long-te rm goal is to cre ate a marke t for all landowne rs to be
paid for all of the natural capital on the ir land. We ’re starting in
20 21 with fore st carbon. We will facilitate quarte rly cycle s.
● Le ve raging Base map and additional datase ts to asse ss the
busine ss-as-usual (BAU) harve st activity base line for a prope rty.
Landowners are selling a commitment to defer timber harvest
● Buye rs are paying for carbon offse ts that are ge ne rate d harve st
de fe rral. Deferred harvest = retained carbon on the landscape
● Succe ssful pilot program in Pe nnsylvania in 20 19/20 20 , now
ope rating in 16 state s and will be in all of the contiguous state s by
e nd of 20 21
Go to www.silviaterra.com/ncapx/landownersWhat makes NCAPX unique?
1-ye ar te rms No fe e s for No acreage
landowne rs minimums
to participate
Go to www.silviaterra.com/ncapx/landownersHow does NCAPX actually work?
1. The fore st landowne r submits information for all of the prope rty unde r
the ir owne rship. This is free and zero-commitment
1. SilviaTe rra remotely asse sse s the harve st risk across all acre s on that
prope rty and re turns an “e ligible carbon volume ” to the landowne r
1. Landowne r de te rmine s how much harve st the y are willing to de fe r in
orde r to re tain some or all of the e ligible carbon on the ir prope rty,
and at what price . “Bids” are submitte d with the NCAPX Se lle r
Agre e me nt
1. SilviaTe rra matche s bids with buye rs and re turns counte r-signe d
NCAPX Se lle r Agre e me nt to landowne r. 1-ye ar de fe rral pe riod be gins.
1. At e nd of de fe rral pe riod, SilviaTe rra ve rifie s de fe rral commitme nts
we re made and pays landowne rs pe r the Se lle r Agre e me nt bids
Go to www.silviaterra.com/ncapx/landownersNatural Capital Exchange- 21B (Spring) 2021B is the largest forest carbon project ever in the US by acreage. 119 landowners and 1.17M acres under contract
21B Size of forest landownership.
Category Number of Total acreage Harvest Deferral
participants represented Credits (HDCs)
(approx) sourced (approx)
Small (5,000 27 1,096,800 116,500
acres total area)
Total 119 1,169,600 137,200
137,200 HDCs is approximately 3.4 million tons green weightUpdate on NCAPX 21B
Forest carbon supply
● US$17 pe r harve st de fe rral cre dit (HDC) or about one truck load of
25 gre e n tons
● Molpus e nrolle d 468,0 0 0 acre s (WSJ April 20 , 20 21)
● Smalle st participant was 37 acre s
● 42% of prope rtie s unde r 50 0 acre s
● Payme nts afte r one ye ar to NIPFs range from $85 to >$25,0 0 0
Buye rs of harve st de fe rral cre dits (WSJ April 20 , 20 21)
● Microsoft Inc.
● Royal Dutch She ll PLC
● South PoleHow does a landowner enroll?
1. Eligible landowne rs should visit ncapx.silviaterra.com and cre ate
the ir fre e landowne r account
1. Landowne rs will be aske d to provide basic contact information and
basic prope rty information
1. Landowne rs submit boundarie s for all of the prope rty unde r the ir
owne rship, re vie w e nrollme nt docume nts, and submit the ir re que st
for e ligible carbon asse ssme nt.
1. Eligibility Re ports will be de live re d we e kly from April 17 through
June 1. Assessment is entirely remote and no management plans
are required.
Go to www.silviaterra.com/ncapx/landownersImportant dates for NCAPX 2021C
Today: Landowners are able to submit properties and enroll
April 13th: The first batch of Eligibility Reports were sent to landowners.
Reports will be delivered every Thursday through June 4th
June 1st: Enrollment closes for NCAPX 2021C
June 7th: Bid submissions are due
Week of June 7th: SilviaTerra matches buyers with sellers
July 1st: Harvest deferral period begins for participating landowners
June-July, 2022: SilviaTerra verifies and pays landowner + affiliates
Go to www.silviaterra.com/ncapx/landownersFrequently asked questions
How much will a landowner get paid per acre?
This is difficult to know without a landowner submitting their property
information. Many factors influence financial potential, including:
● Rotation age , spe cie s mix, and historical harve st activity
● Local timbe r e conomics
● Othe r commitme nts (e x. conse rvation e ase me nts)
Submitting prope rty information and re que sting an e ligible carbon
asse ssme nt is fre e and no commitme nt. Eligibility re ports will be
de live re d we e kly. This is the faste st way to ge t an accurate e stimate .
In 21B, landowne rs with me rchantable timbe r will be paid $15 to $70 pe r
acre on e ligible acre s at the e nd of the one ye ar contract.
Go to www.silviaterra.com/ncapx/landownersFrequently asked questions
How much should a landowner charge for their deferral credits?
● By comple ting a bid in the NCAPX Se lle r Agre e me nt, landowne rs
choose the price s at which the y are willing to supply carbon to the
marke t. The bid submission form allows for bids be twe e n $1-$30
● Landowne rs can choose to submit multiple volume + price
pairings whe n comple ting the Se lle r Agre e me nt. Only one pairing
will be acce pte d. Sold HDCs represent a commitment to reduce
harvest below the BAU scenario
● Re se arch pape rs from Mississippi State Unive rsity can he lp
provide guidance to landowne rs on what the y should bid base d
on various sce narios. This guidance will be provided closer to
the June 1 bid submission date.
Go to www.silviaterra.com/ncapx/landownersFrequently asked questions
Who are the buyers?
● Strong de mand from Fortune 10 0 and Fortune 50 0 companie s with
big sustainability targe ts
● US-base d firms, voluntary marke t
● Microsoft has announce d major commitme nt for 20 21C
● Ce rtification is important ne xt ste p.
● Ve rra Carbon Standard Conce pt Note Approval (May 7 20 21)
Go to www.silviaterra.com/ncapx/landownersFrequently asked questions
How does the program handle natural disasters?
● If a natural disturbance occurs during the one -ye ar pe rformance
pe riod and this re sults in a landowne r not me e ting the ir de fe rral
commitme nts, no payme nts would be made for the associate d
HDCs.
● Landowne rs will not be pe nalize d furthe r and will not be barre d
from future participation in NCAPX cycle s
Go to www.silviaterra.com/ncapx/landownersQ&A
www.silviaterra.com/ncapx/landowners
Jeff Wright jeff@silviaterra.com 843 575 9926You can also read
