Purpose
- Explores and develops market-based solutions.
Summary
The Carbon Canopy joins together, under a single common umbrella, a diverse collection of stakeholders ranging from private landowners and environmental groups to multi-national corporations working together to develop innovative market-based solutions to conserve and expand ecosystem services on private forest lands in the Southern US. The Carbon Canopy is currently developing working forest carbon projects based on rigorous environmental standards with southern forest landowners to support the expansion of forest restoration, conservation and FSC certification in the Southeastern US, beginning with the Southern Appalachian region. .
Dogwood Alliance Field Trip
Description
Pilot –Project Development
As of January, we now have two forest carbon projects totaling over 13,000 acres moving forward in full project development in southwestern Virginia. For both of these projects we conducted the initial carbon inventories and modeling necessary for estimating potential sellable carbon based on improved forest management standards under Air Resource Board (ARB). In both cases, the potential financial returns were significant enough for the landowners of these two tracts to commit to move forward with the more rigorous carbon inventory and other steps necessary to register and sell the carbon according to the ARB standards.
First, The Forestland Group (TFG) who agreed to move forward with a 20,000 acre project in 2011 realized that the mineral rights on their forestlands in southwestern Virginia were owned by a mining company. This required them to reassess the project to determine a path forward. We met with TFG in March and they proposed to move forward with two projects where mining was unlikely to occur for geological reasons and determined how to account for the limited risk for purposes of the ARB requirements related to permanence. As a result, in March, TFG proposed two potential Carbon Canopy projects. The first project was a 12,300 acre project and the second was a 20,000 acre project. Agreement was reached to move forward on the 12,300 acre project first, as the 20,000 acre project involves a more complicated project based on expanding buffer zones around hundreds of miles of streams and rivers across multiple forest tracts. While the stream buffer project is an exciting one that we want to pursue in the future, our focus is on completing a project as quickly as possible, so agreement was reached to begin full project development on the 12,300 acre project first.
To date, we have finalized the methodology and survey matrix for the project. Field work and data collection will take place in leaf-off season, when conducting carbon inventories is much easier, beginning in November. In the interim we are developing the project file with TFG to move forward with the registration process in a timely way in early 2013.
Second, after completing an initial project feasibility assessment of the 1,400 acre Pine Mountain Tract in Virginia owned by Keith Argow, President of the National Woodland Owners Association, Keith has committed to move this project to completion. The FSC Management Plan for Mr. Argow’s property, which sets out limited silvicultural treatments for the growth of high grade hardwood saw timber, has already been completed and the parcel is now part of the Columbia Forest Product’s FSC Group Certificate helping to build the company’s certified wood supply basket. Carbon Canopy partners Pacific Forest Trust and Forest Stewards are currently conducting the technical carbon growth and yield modeling and completing the protocol paperwork. We project carbon credits from this parcel will be available in the market for purchase in January of 2013. Working with the Carbon Canopy buyers Group we have a preliminary agreement for the transaction at a premium market price of $15.00 a ton. This fall we will begin planning for the public launch of our initial transaction with all partners committed to publicizing the transaction.
Additional Potential Projects
In addition to the two projects above which are now in full project development, we have identified seven additional potential Carbon Canopy projects totaling over 12,500 acres. First, we completed the initial pro-forma financial and carbon accounting analysis which demonstrated significant potential carbon from improved forest management on one of these projects, a 3,100 acre tract in Western North Carolina owned by former congressman, Charles Taylor, which could generate as much as $1.7 million in carbon sales the first year. We met with Charles several times this spring and he is currently determining whether to incorporate carbon management into his long-term plans for this property. It is important to note that any decision to commit to complete a carbon project rests solely with the owner as it requires a long-term investment.
Second, we have made significant progress on an additional 4,300 acre parcel in Western North Carolina held by Balsam Mountain Preserve as part of preserving high conservation values within a high end real estate development. After several meetings with the Preserve, North American Land Trust and the real estate developer, we are in the process of conducting an initial feasibility assessment on this project which we expect to complete sometime at the beginning of 2013. This is a very interesting project which could serve as a model, as it involves working with the land trust partner to interpret an existing easement which allows commercial harvesting to significantly tighten the restrictions to undergird an Improved Forest Management project with limited commercial harvesting to achieve conservation objectives.
Third, Keith Argo of the NWOA has asked Carbon Canopy to conduct an initial project feasibility assessment on a second, tract he owns in West Virginia. Keith hopes to register this project with ARB in May of 2013.
Fourth, we are also planning to begin a project feasibility assessment this fall with Upstate Forever and the Naturaland Trust on the 1,400 acre Nine Times parcel in the mountains of South Carolina.
Fifth, in addition, we have worked with the Foothills Conservancy in North Carolina to review their existing portfolio and have ruled out moving forward with projects on their existing fee lands. However, we are working with them in discussions with a conservation buyer on several tracts currently for sale, including a 2,100 project that would protect important headwaters for the Catawba River.
Sixth, the procurement team at Domtar’s mill in Kingsport has identified a saw mill owner with 850 acres in northeastern Tennessee that has agreed to meet with us to discuss the potential of a Carbon Canopy project on her land. We are meeting with her in August.
Finally, we have been in conversations with American Rivers who has introduced us to Mountain Conservation Trust of Georgia regarding an important 880 acre forest tract in the Etowah River Basin. Carbon Canopy and American Rivers will be meeting on August 12th with the land trust to visit the property and share information about how a carbon project might work on this property.
Strategic Corporate Partnerships
In addition, to securing a commitment from the buyers group to pay a premium of $15/ton for the initial pilot project, during the grant period we have also initiated a conversation with Wells Fargo Bank about how they could assist us in creating new mechanisms to help finance future Carbon Canopy projects. As set forth in our newly adopted strategic plan, over the short-term, Carbon Canopy, through largely corporate donations, will cover the costs of conducting the carbon inventories and modeling necessary to meet ARB standards and bring several initial small landowner projects to fruition. Over the long-term, we recognize the need for these projects to work in absence of Carbon Canopy financial support. Therefore we have been engaging banks with a goal of developing a financing mechanism to help small landowners cover up-front costs associated with carbon project development. Wells Fargo is a California based financial institution and is likely to be interested in creating such systems since California will have a regulated carbon market starting next year. As a result of outreach and discussions over the past year, Wells Fargo invited us to submit a proposal for funding for Carbon Canopy as well as a request for in-kind donation of their technical expertise and services in developing financing models.
In addition, during this period, we continued to conduct outreach to corporations as potential partners and offset purchasers. We held preliminary conversations with both Disney and Bloomberg. In addition, Staples and Dogwood Alliance hosted a “Table Topic” at the Ceres conference in Boston this past spring.
Engaging Land Trusts
This spring, Dogwood Alliance and Pacific Forest Trust presented on behalf of Carbon Canopy at the Southeast Regional Landtrust Conference in Georgia. The well-attended presentation led to discussions with landowners in Georgia and with a representative from the Department of Defense’s base buffer program. That discussion has since matured and Carbon Canopy made a webinar presentation to DOD conservation partner organizations around installations in Virginia, Kentucky and Tennessee. Though no specific projects have been identified yet, these discussions are now ongoing.
Engaging landowners
In addition to engaging landowners on specific projects as described above, Staples sponsored a Carbon Canopy advertisement in National Woodland Owner’s Association’s Spring 2012 issue of National Woodlands magazine. In addition, the editors have committed to a second feature article on the Carbon Canopy and the forest carbon data collection necessary for project development in the fall issue.
In May of this year we hosted our Carbon Canopy “field trip” and meeting of partners. Over two dozen people visited the two projects we have underway in southwest Virginia to learn more about these projects, including how carbon inventories are conducted. Attendees included representatives from Dogwood Alliance, Staples, FSC-US. Rainforest Alliance, Oak Hill Fund, Blue Moon Fund, Columbia Forest Products, Green Press Initiative, The Nature Conservancy, Pacific Forest Trust, The Forestland Group, National Woodland Owners Association and a team of four procurement foresters from Domtar’s Kingsport Mill who will be integrating Carbon Canopy into their strategy for increasing supply of FSC in the South.
Strategic Planning
Carbon Canopy conducted its semi-annual business meeting in May and finalized the five year Carbon Canopy Strategic Plan that had been developed at previous meetings. Because the State of California has moved the administration and enforcement of regulated forest carbon project standards and protocols from the Climate Action Reserve (CAR) to the Air Resources Board (ARB) Carbon Canopy made the strategic decision to develop its projects so that they are compliant with ARB. Projects that comply with ARB will give buyers in the voluntary market more confidence in their long-term value. Also, the development of ARB-compliant projects will enable the Southern Appalachian region to benefit from a maturing regulated carbon market in California.
This switch in strategy will not affect the rigor of the standard, as ARB based its protocol on CAR, and now has the added strength of State oversight. As California begins to enforce a cap on carbon emissions beginning in 2013, demand for ARB-compliant offsets is expected to exceed supply over the coming years. The Southern Appalachian region could benefit from this increased demand, but only if it is well-positioned to develop ARB-compliant projects. Carbon Canopy is therefore blazing the trail for establishing the Southern Appalachian region as a potential significant source of ARB-compliant offsets.
The five year goal is to move 100,000 acres of ARB-compliant, FSC-certified projects forward in the Southern Appalachian region. The next two years includes a strategically directed short-term push to develop multiple and diverse demonstration projects across the region with a goal of completing five projects totaling 20,000 acres by the end of 2013 and moving an additional five projects totaling an additional 20,000 acres forward into full project development for completion in 2014. These initial projects are intended to test feasibility and approaches with differently sized projects, develop templates (e.g., sales contract terms sheets) and create replicable procedures to make scale-up feasible in subsequent years. The key strategies will be set forth in our full funding proposal.
Conclusion
While we still anxiously await the completion of a carbon transaction in the Southern Appalachian region, we continue to build not only develop the technical model for project development but also the confidence in the model of linking ecosystem services with sustainable forest management that we are working so hard to create. We were honored this year when WRI’s issue briefing on Carbon Canopy gave us a lot of credit for taking a concept that many have been talking about for years and making it happen on the ground. We greatly appreciate the Walker Foundation’s support of this paradigm-shifting work and hope you, too, feel proud of all this project has accomplished over the past few years.
Purpose
For too long, the Southern forest economy has been based almost exclusively on resource extraction at the expense of other forest values such as carbon sequestration, water quality and biodiversity. Carbon Canopy, is working to shift this paradigm through leveraging the greening of the US marketplace into a source of revenue for landowners that commit to manage working forests for long-term carbon sinks under FSC forest management and Climate Action Reserve (CAR) carbon accounting protocols tied to conservation easements.
Scope
Forest loss and degradation account for 20% of global carbon emissions. While forest destruction in the developing world is a primary factor, a recent report from the proceedings of the National Academy of Sciences found that the US leads the world in percentage of forest cover loss, attributing much of that to industrial logging in the South where 2% of the world’s forests produce about 20% of the world’s wood and paper products.
Carbon Canopy's strategy for conserving forested landscapes focuses on creating financial value for leaving more trees (and carbon) in the woods. By strategically engaging key players in the forest industry in the largest wood and paper producing region of the world our work informs national and even global forest conservation and climate policies.
Amount Approved$20,000.00
on 11/18/2011
(Check sent: 11/25/2011)
