Forest Carbon Credits Alternative Investment Opportunity
Victor Garlington
We Develop Eco-Friendly Agricultural Crops For Energy, Timber & Food. ??#trees ?? #carbonmining
The world has a long road ahead to meet its climate goals, new tree forest and the forest carbon credits market is just one of many important solutions.
Carbon credits put a price on carbon to incentivize investments and innovations in technology and behavior that helps us reduce our global emissions.
Forests are being used to reduce net global emissions, which also reflect the types of projects that provide forest carbon credits.
Almost 25% of global carbon dioxide emissions are now covered by pricing mechanisms, with a market value of more than USD 80 billion in 2021. Forestry is one of the most popular and fastest-growing sources of carbon credits.
Forest carbon credits are growing at 20% per year driven by independent supply from mainly emerging regions, and compliance demand concentrated in North America, Europe and Oceania.
It’s clear that the world can only meet its climate goals through a combination of emissions reduction and removal solutions, and this is where forest will play a critical role.
DEMAND
About 20% of forest carbon credit demand comes from the voluntary market – organizations and individuals that buy credits to offset their emissions, for example to achieve a net-zero pledge. And the remaining 80%, the demand from compliance markets, represents purchases from parties that have a legal obligation to reduce their emissions – in many cases, companies, such as those in heavy manufacturing or energy production.
While governments play a role in creating compliance markets, for example by setting emissions quotas and establishing emissions trading schemes, government represents a small part of actual purchases of forest carbon credits.
Companies that are unable to reach their greenhouse gas (GHG) emission targets can purchase carbon offset credits by investing in environmental projects that can avoid, reduce, or remove carbon emissions.
For instance, an airline company that wants to claim carbon neutrality can calculate how many carbon emissions they are unable to get rid of. They can then purchase an equivalent amount of carbon offset credits by investing in a regenerative farming project using paulownia tree with the VCM. In doing so, the (aviation, building, power, industrial, transportation) company can claim carbon neutrality.
As of 2022, the real voluntary carbon market is valued at around $2 billion.
Where do these Credits Trade?
There is currently no centralized voluntary carbon market. Today project developers, or companies can sell their credits directly to buyers or through a broker. Project developers can also sell their credits to a retailer who can then resell the credits to a buyer. All voluntary credits must be verified by an independent third party and must adhere to existing standards.
Landscape For Compliance Carbon Market
The value of the global carbon credit market reached ~$850 billion in 2021, a 164% increase from 2020.
Currently, there are 3 major Emissions Trading Systems around the world.
The picture above shows the global ETS map of the compliance credit market.
Afforestation and reforestation (A/R): Here the approach is to establish forests on land that was previously forested but was cleared by human activity and land with relatively low carbon stock, ecological and economic value like deserts and scrubland.
Creating new forests and avoiding deforestation is a low-tech and cost-effective way to tackle climate change. New forest and old growth forest trees offer many co-benefits to carbon sequestration, including increased biodiversity and erosion control.
Afforestation/reforestation projects can simultaneously earn carbon credits and be managed for the production of timber. Second, established plantations can earn carbon credits if they are managed in a way that increases carbon sinks, for example, by improving growth, reducing damage, or reducing harvest.
Commercial forest production projects are a significant carbon sink and offers other economic and climate benefits. These benefits are larger when considering the products that substitute less climate-friendly alternatives, like lumber to replace concrete and steel in construction, cartons to replace metal, and biofuels to replace fossil alternatives.
领英推荐
Paulownia Forests Project Commercial Viability
Benefits of paulownia trees:
Full Report: Carbon Sequestration Ability of Paulownia Tomentosa Steud
Country USA
What Are Paulownia? https://bioeconomysolutions.com/wp-content/uploads/2021/07/What-Are-Paulownia.docx.pdf
Type of species
A fast-growing plant of Chinese origin, Paulownia, is set to replace other wood being used for timber, like poplar and eucalyptus, by projecting itself as a wood that can be used for furniture purposes. Growers get much higher remuneration than through other forestry means.
A fast growing, high-yield, non-invasive, non-GMO hybrid Paulownia tree that makes planet Earth a better place to live for all forms of life. The hybrid paulownia tree is a trans-genera clone; it is not a genetically modified organism (GMO). As is the case with all trans-genera clones (example: peach x apricot = sterile nectarine), it is seed-sterile and therefore non-invasive.
Forest carbon credits are here to stay. More and more companies and individuals are feeling the need to do their part to reduce their carbon footprint. And, for companies that want to achieve carbon neutrality, the VCM and planting trees is often a necessary tool.
LEARN MORE
Let's chat about paulownia tree solutions for sustainable Forest carbon credits projects.
Where to buy paulownia? We're providing new paulownia trees from our U.S. South Carolina Paulownia tree farm facility.
Contact Us for details. Office: 843.305.4777 | Email: [email protected] Here's a link to our online calendar, schedule a conference call with us:
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References
1 Climate Neutral Group. What Exactly is 1 Tonne of CO2? Accessed Aug 4, 2021 2 Carbon Offset Guide. Voluntary Offset Program. Accessed Aug 3, 2021 3 Carbon Offset Guide. Mandatory & Voluntary Offset Markets. Accessed Aug 3, 2021 4 UN Climate Change. Emissions Trading. Accessed Aug 3, 2021 5 S&P Global. Voluntary Carbon Markets. Accessed Aug 3, 2021 6 World Bank. State and Trends of Carbon Pricing 2020. Accessed Aug 4, 2021 7 Rabobank. Can voluntary carbon markets change the game for climate change? Accessed Aug 5, 2021 8 World Bank. Report of the High-Level Commission on Carbon Prices. Accessed Aug 5, 2021 9 UN Environment Programme. Discussion Paper on Governmental Carbon-Pricing. Accessed Aug 5, 2021 10 Carbon Credit Capital. Value of Carbon Market Update 2021. Accessed Aug 5, 2021 11 White & Case. Voluntary Carbon Markets:A Blueprint. Accessed Aug 5, 2021
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