- Welcome everybody to the final talk
in the Forest as Natural Climate Solutions track.
This is Jim Shallow and this is his talk,
Carbon Cents, Markets for Conservation.
Jim is from the Nature Conservancy in Vermont,
and we'll do 15 minutes for Jim
and then five minutes for questions at the end.
- Thank you, Naomi and welcome everybody.
As Naomi said, I'm the Conservation Director
with the Nature Conservancy's Vermont Chapter.
The Nature Conservancy is protecting lands and waters
on which all life depends.
And what I wanted to talk about today
is about how we are using carbon markets here in Vermont
to advance conservation goals that both the State of Vermont
and TNC have to protecting our landscape
to make sure that it's resilient and connected for wildlife
and people going forward in the face of climate change.
So I want to set a little context first
then I'll talk about three different projects
and hopefully wrap this all up in 15 minutes
and take as many questions as possible.
So just important sort of way to think about this,
the way we're looking at things now
at the Nature Conservancy
is we're facing two existential crises at the global level.
We have a climate crisis where we've seen a rapid increase
in warming since 1950 and we are also seeing
a rapid decrease in biodiversity.
And what we're learning too is that we can't try
to solve each of these problems in absence
of thinking about the other one.
The International Governmental Panel on Climate Change
and the Intergovernmental Platform on Biodiversity
and Ecosystem Services released a report earlier this year
and they're finding really was, if you want to boil it down
was limiting global warming to ensure habitable climate
and protecting biodiversity are mutually supportive goals
and their achievement is essential to sustainably
and equitably providing benefits to people.
So can't solve one without the other
and our nature is a way to do that.
So forests are a critical natural climate solution.
The way we manage our lands across the landscape,
both in terms of wildlands and manage Woodlands
can play a role in both enhancing climate,
I mean enhancing the carbon being stored there,
but it also plays a critical role in bringing carbon
out of the atmosphere and improving habitat
across the landscape.
So we're looking at this from a Vermont perspective,
we have done mapping that shows a network of lands
that we call the resilient connecting network.
It overlaps very closely with Vermont's,
the VCD conservation design and protecting this
it really is looking to forest blocks
as a way to protect that and the resilient connected network
in Vermont it's 53% of our state
yet it's only 38% protected and we don't see
a lot of dollars going into climate
or natural solutions right now.
And yet we know that at a global level,
about 30% of the reductions and storage of carbon
that needed to be done can be done
through natural climate solutions
and much of that is in forest.
So protecting forest, managing timber lands is better
and restoring forests make up a big bulk
of what we need to do or can use
for natural climate solutions
to get us to that 30 gigatons of year of carbon emissions
that needs to happen if we're gonna meet
the Paris Accords goal of keeping the temperature increases
below two degrees Celsius.
So out of this with only about 2%
of the fund's net globally going
to natural climate solutions and even here in Vermont,
the Vermont Housing and Conservation Trust Fund
generally gets an appropriation
of around 10 to $13 million a year recently,
and only 1.5 million of that is going
into natural area protection.
So carbon markets can play a huge role we believe
in helping close the gap and secure lands
to avoid forest loss.
So when you hear about carbon markets
there's two kind of tracks in those.
There's the voluntary market.
These are where big companies, government bodies,
individuals are buying credits
to offset their carbon footprint.
And then there's a compliance market of which cap
the biggest one here in North America
is the California Air Resources Board
and they have a cap and trade system out in California
that allows companies to stay under their cap
by buying carbon credits.
So I'm gonna talk largely about the voluntary markets
because what we've learned here through our experience
with projects is that doing compliance projects
is very difficult in our forest system.
So there's three sort of big carbon projects
that we've been looking at.
These are traditional large forest carbon project.
For us I'm gonna talk about our Burnt Mountain Project.
We also have another one that we're developing
in Southern Vermont called
the Southern Vermont Forestry Project
which involves a parcel that we acquired
a few years ago in Wyndham.
And then the Forest Carbon Co-ops
which is an aggregation approach to developing projects
and then lastly the Family Forest Carbon Program,
which my colleague Chris Zimmerman talked about
in an earlier session.
So the Burnt Mountain Carbon Project.
Well wait before I want to get into,
I just wanted to say that the voluntary markets
are a growing source of income for conservation.
We are seeing a big increase, even this year
we're 27% higher than last year and the market price
is moving upwards to around an averaging around $14 a ton
for North American high quality forest carbon projects.
So Burnt Mountain is our biggest project
that we've done to date.
It's 5,400 acres.
We acquired this land in 2018.
When we bought it, it was a $2.6 million project.
We raised about a million dollars to cover that
and we are looking to carbon income to help offset
the rest of that project acquisition.
Our modeling that we've done with Bluesource
and the project development working with our partners
at Bluesource we believe that we can raise
about $1.9 million in potential revenue coming off
of 274,000 credits that would be generated.
So the reason we acquired Burnt Mountain
is that it's in the middle
of a large 11,000 acre forest block
that's largely conserved by state lands
and other conserve properties and it was an opportunity
for us to move this property out of a managed land
into a forever wild category.
And the reason we were doing the forever wild approach
was that Vermont has set a goal of 9% of our forest being
in late successional condition and yet we're only
at about 3.2% at the time we acquired this property.
So we wanted to add to that and it's a large property
so it's gonna be resilient in the face of climate change
and will allow nature to move forward
and kind of have disturbances happen
yet be able to bounce back from those disturbances.
In addition to doing the forever wild project on it,
we've also it gave us the opportunity
to do some fresh water restoration.
Part of the property is 90%
of it is in the Calavale watershed.
This is a headwater stream that feeds
into the Memorial basin which then feeds
into Lake Champlain, providing drinking water
for 250,000 people.
This stream had a lot of its woody material removed
once upon a time and so we started a project to add wood
to the stream to help it retain water better
in the more flashy precipitation events
that we're seeing as a result of climate change,
increase habitat for fish species like brook trout,
and generally overall increase the value of the stream
for habitat and for flood retention.
So the carbon dollars are all allowing all of this work
to happen and so it's been an important opportunity
for us to do this project.
So what have we done to date so far
on the carbon side of things.
We are projecting to generate 247,000 credits
over the next 10 years.
To date the American Carbon Registry has issued
where we have this project registered 99,000 credits.
We've sold 74,800 of those.
The vast majority of those have been retired so far
as offset that companies want
and we have a pending sale 2000 credits.
This has resulted in about $550,000 in net revenue
for our chapter to cover the cost of this project to date.
So there are also other emerging opportunities.
So these large projects are gonna be few and far
between in Vermont just given the parcelized landscape
that we have.
So we started looking at opportunities to do carbon co-ops.
This is an aggregation approach.
So I'm going to talk about that next
and then the Family Forest Carbon Program.
So why are we looking at these smaller opportunities?
It's really important because most of Vermont
is family forest and owned in small parcels.
Individuals and families own the largest portion
of US forest.
Family forest make up 38% of our forest
in the United States.
That's more than the federal or government or corporations.
And yet this is an important ownership group
that's vital to achieving conservation impact at scale.
And here in Vermont those numbers play out as well
with over 78% of our forest in private ownership
and the average parcel size here in Vermont
that's enrolled in the current use program
is 117 acres versus about 69 acres
of non current use properties.
So getting to these ownerships,
we believe is gonna be an important part of conserving
that resilient, connected network and we believe that carbon
can help those landowners hold onto those lands
for the future.
And yet most of these land ownerships
they've been locked out of these markets.
You'll see that less than 1% of the projects to date
have involved ownerships
that were less than a thousand acres.
So it's important to begin to make these markets
more equitable for landers.
So we've partnered with the Vermont Land Trust
who took on a really unique project in the Northern Greens.
This is a critical wildlife corridor
that links the Green Mountains into Canada.
And after a feasibility study
that the Vermont Land trust did that showed
that this was a possibility to aggregate projects together.
VLT teamed up with The Nature Conservancy
and the Spatial Informatics Group to develop
a pilot of an aggregation project and then worked
with the Cold Hollow
to Canada Regional Conservation Partnership
to find a way to develop the project.
So to date, as I mentioned,
so what emerged out of this was 8,543 acres enrolled
in the ACR registry, 10 landowners managing 12 woodlots
and we'll be doing that with the eye towards enhancing
the carbon but also that's gonna maintain the landscape
for wildlife conductivity and help improve
the forest condition for wildlife
and for the future timber value and that as well.
Project is estimated to generate 429,000 credits
over the next 10 years.
To date we've sold about 200,000 of those credits
in a presale to Amazon and that's resulting
in 70% of that net revenue going back to the land owners.
So we believe it's a successful pilot.
We're still continuing to market the additional,
the other credits that have not been sold yet
and we'll be looking for opportunities
to potentially do new co-ops going forward
once we feel sort of that we've wrapped this project up.
The other approach we're taking now is also recognizing
that that program carbon aggregation really requires parcels
of about 200 acres upwards to make that viable
and so we still have a lot of these smaller parcels
to get to.
So that's where the Family Forest Carbon Program comes in.
This is a partnership with the American Forest Foundation
and The Nature Conservancy
and it's a very different approach.
It pays landowners for practices that have been modeled out
to show we'll add more carbon over 20 years to the forest
over common practice in the region.
So the way that this works largely
is that the landowner engages
with the American Forest Foundation, they sign a contract
that will generally one to 20 years,
they get a payment for that,
they hire a consulting forester
to implement a plan for that
and then that an FCP representative goes out and verifies
the completion of the practice when it's done.
And there's monitoring set up across the whole region.
Random set is modeled monitoring regularly,
and then that's compared
to a dynamic baseline based on FIA data.
And then once that's done, that's what the credits show up
in the registry and those become available
in the voluntary market for companies to purchase
and then that income goes back into the project to cover
the initial payment that went into the landowners
so that the new landers can be enrolled over and over again.
And then the landowner has a commitment
to maintain those practices over 20 years.
The benefits of this on the wildlife side
is that these practices mirror very closely
with habitat practices,
things like the Forest Bird Initiative that Audubon
has been managing both in Vermont and throughout the region.
These practices like expanding gaps
with retaining large diameter trees
and woody debris in there is beneficial
for creating understory habitat for forest birds.
The thinnings will create complexity within the forest
and diversity in that forest type
which we beneficial for these forest birds
and then other wildlife philosophy benefit
from these practices as well as allowing the forest
to grow larger trees and create more snags
and down woody debris.
We believe all of these practices
that will have a carbon benefit
will also have some co-benefits for wildlife.
So that was a lot to cover in 11 minutes.
And if you want to learn more about these practices,
there's a guide that we've put out,
it's a healthy forest guide.
This will provide 10, 12 different ways for landowners
and the others to see practices that will add carbon,
it also describes the wildlife benefits for those.
There's a link here that you can find that,
or you can just Google that and you'll find that
on the TNC website,
that's nature.org/climatesmartforestry.
And then if you want to learn more about the work
that we're doing here in Vermont on carbon,
you can go to the nature.org website and under the Vermont,
you'll find stories in a forest carbon page.
So there's a lot to cover in a few minutes,
I guess my closing remarks are, we see that carbon markets
can be a way to create new revenue for conservation
and add co-benefits for wildlife along the way
and we'll continue working to promote
the Vermont's Climate Action Plan
that was approved a few weeks ago.
References a lot of strategies for improving forest carbon
and I encourage you to look into that more
and as we move forward in Vermont
to address our climate crisis and the biodiversity crisis.
So thank you for your listening to me and Naomi,
I'll open it up to questions.
- Yeah, people can feel free to put questions in the chat.
I had a question actually, that you mentioned early on
that the California compliance projects are,
I think you said difficult in our forest systems
and I was just wondering
if you could explain that a little further.
- Yeah, Thank you. That's a good question.
So the way that California has set up their baseline
for these projects is it uses a regional stocking.
As soon as the regional baseline is established based
on the super sections that the forest services established.
And so our stocking in our region is fairly high.
So to be able to show the additional carbon that's there,
you have to have a really highly stocked forest
as well as have enough acres to sort of get that number up
to make the project financially viable.
I will say that all of these projects have significant costs
that goes into both development
on these traditional forest projects
as well as ongoing monitoring.
So to get enough of a delta between that regional baseline
and the carbon that's there to generate enough credits
to make the project viable.
What we're seeing is probably a minimum of about 5,000 acres
is what you're gonna need here in the region.
And what we initially went try to enroll Burnt Mountain
in the compliance market
and when we did our carbon inventory,
we found out there just wasn't enough carbon onsite.
The difference in the voluntary market
at least with the ACR approaches,
they don't model on a regional baseline largely it's modeled
on a project baseline.
So you look at a counterfactual potential harvest scenario
that could happen on the property
and then what you're gonna do going forward
and that's how you generate the credits.
- Gotcha. Thank you.
And we have a few questions coming in in the chat,
but maybe we have time for one
and then if you want hang around
in this meeting space you can.
Somebody said, excellent talk, thank you.
Can you explain retired carbon credits?
- Yeah, So in all of these, so when a company
has a climate strategy to go carbon neutral for instance,
they will do everything they can internally
to lower their costs and capture
as much of that within their own operating.
And then for many of them there's still that last little bit
that they just can't get to neutral
and so they buy the credits to do that.
So when they buy those, they retire the credit.
And so that nobody else they can't trade that credit
to another company to take advantage of those.
These credits are put aside and they're no longer available
for use as a carbon offset and they're retired
and the registry tracks those and it's sort of off the books
and we can't do any double counting from that.
So that's how the retiring goes.
The difference you'll see in our numbers at Burnt Mountain
is we have a couple of sales that have gone
where companies there's like one tree planted
is one of the purchaser of these credits
and they use these along with their tree planting projects
to improve the carbon benefits of those projects
and they retire those
as those planting projects go in place.
So eventually all those credits will be retired as well.
- Hi, Jim, I have a question for you if you can share.
- Yeah I can hear you.
- All right. Great.
Thanks for the great talk really interesting.
I own manage 50 forest acres at Central Vermont
that's enrolled in current use.
So based on this program that you're talking about,
family forest something, sorry.
- Family Forest Carbon. Yep.
- So you basically saying
that there is a agreed upon management plans
for the state of Vermont at which if I wanted to enroll
in this well are there options to do that now
and what I then need to hire a consulting forester
to update my plan to enroll this or how.
I'm just kinda curious, are there options
for local Vermont land owners now?
And what does that mean
in terms of their current use and so forth?
- Yeah. Good question.
So Aaron, the way we first, you will have the opportunity.
We're developing
sort of putting all the pieces together right now
with our target is to start enrollments
in Family Forest Carbon later this spring
or in the upcoming spring.
So keep an eye out for that. Your 50 acres could qualify.
We will be making payments
in sort of maple beach hardwood type.
That's what we've modeled out the benefits for.
And what will happen is you will say, yes I'm interested,
a representative from the Family Forest Carbon Program
will meet with you.
If you have a management plan,
we'll review that management plan to see
if we need to make any changes to that,
to follow the practices that we've developed.
You may have to amend that plan
and if so, there may be payments available for you do that
and then you would get an upfront payment
where you sign a contract saying
I commit to following these practices
and you'll get a payment that will go out.
There's like an upfront payment and then regular payments
through the contract period.
- Very interesting. Okay, thanks very much.
- And our hope is that it will be very synchronous
with current use practices as well.
We've been in many conversations with Keith Thompson
and others at the forestry division to make sure
that there aren't conflicts there.
- Okay and that was kinda what I was wondering about
because just within a lot of those plans
there is definitely some periodic cutting,
seeing and so forth and but which I think can be beneficial
for meeting multiple management objectives so.
- Yeah, and just to be clear that the practices
will allow for harvesting.
So the ones we're looking at our grow older forest,
so that's sort of maybe delaying your harvest out
and then creating gaps with some complexity
and thinnings and while retaining carbon in the forest.
- Thanks very much for the information. Great talk.
- Sure, thanks. Thanks for your interest.
- I was just wondering about soils and soil management
and wondering if there were any practices
that were part of the forest that are being managed
for carbon storage that were specific to soils
or newly developed BMPs for soils to protect the carbon
that's in the property in the soil.
- Yeah, we haven't modeled the practices out
for soil carbon.
We believe hopefully like for instance,
in the delayed harvest kind of approach,
that's gonna help build for soils over time,
but we didn't do intentional modeling around that,
just given the complexities and what we know some.
So maybe more to come as we start to get this going
but not right now.
- Okay, great. Thank you.
- Good question.
The soil seems to be the question
that's always coming up
in all of these carbon conversations
and I don't think we've really been able to fully wrap
our head around how we do that.
The way ACR handles it in the traditional projects
is they just kind of, they assign a number for soils
and they give it to you.
It's just a flat, simple number that they say,
if you have these conditions you anticipate
to have this much carbon stored in the soils.
- And is that at least parsed out by like
a wetland soil versus an upland soil?
No, it's just soil. Okay.
- Yeah. - All right.
- I don't know all the black box calculations
for how they with that number.
Yeah. - Yeah.
- I'm curious if TNC has been working
to develop like guidelines and processes
that could be distributed to other land trusts
or other conservation organizations
to try to replicate some of this.
I think focusing more on like
the big sea conservation projects perhaps
more so than the family forest projects.
- We haven't done it yet. It's our hope is to get to that.
A couple things we're learning upfront is the timing
of if you're doing an easement on the property
is really critical for this because any restrictions
that you have on the property
prior to enrolling the carbon project is gonna take away
from your baseline, right?
So if you put an easement on prior to registering
the project and that easement has restrictions
on what kind of forestry you can do
or where you can do it on the landscape and all that,
all of that needs to be factored into your baseline.
So our advice to anybody, if you're looking
at a larger project is make sure you're timing that well.
Register your project.
You have up to a year
to put the easement on after that fact.
So like when we did Burnt Mountain, we didn't finalize
the forever wild easement until about 10 months
after we acquired the property and enrolled the property
in the carbon registry.
- Yeah, it just seems like the timing is so important
and the steps are so kind of different
than a traditional project that it would just be important
to get that information out to groups
so that they could try to replicate this.
- Yeah and then I think the other lesson that we learned
in this is just how important it is to factor in carbon
into your thinking while you're doing the conservation,
when you're planning out the conservation project.
Because it's really important that for all of these projects
that you're demonstrating
that carbon part of the additionality test
is like was carbon revenue an important part
of the project implementation.
So in our case, we couldn't have done Burnt Mountain
or our Glebe Mountain acquisition
without bringing carbon financing into the equation.
- Right. Great.
Thanks, Jim.
- Jim I had a question.
When this is ready to roll I'm thinking specifically
about the family, small parcel oriented programs.
What's the capacity look like at TNC
or at this family forest group?
If there's a tidal wave of interest,
how bottlenecked are we gonna get.
- So we have two pilots going on.
So the first pilot Andy is down in the Central Alps
in Pennsylvania where there two to three years ahead of us
in piloting this approach and you are absolutely right,
those bottlenecks of like having foresters ready to go,
being able to just do the quick follow-up.
And we've learned a lot from that,
that we need to have that capacity on the ground
or ready to go.
I'm really happy that AFF now has a regional coordinator
for this project.
Richard Campbell, who I believe is still on the line here
and we are factoring all of that in.
And so that's why we're taking this, hey Richard,
this phased approach right now
is a learning pilot right now
which is just looking at Vermont, Western Massachusetts
and Eastern New York, and try to manage those expectations
as we're doing this.
And once we learn and we start building that capacity
that we'll be able to expand that.
So good questions and we'll be learning as we go here.
- Yeah thanks we'll be watching real close
as I'm sure many others well.
- Richard, do you want to say anything?
I'm gonna put you on the spot.
- Yeah, so that's a real question, right?
Is the bottlenecks in our upcoming process to enroll folks.
We're gonna be working with our own staff who exist now,
who are going to be hired and we're also gonna be leaving
on the professional forestry community in Vermont
and across the Northeast and relying on them in a big way
to help to provide those services.
And we'll be working on how to structure that specifically.
I think over the course of the winter and spring
you're going to be hearing from us a fair bit
at these sorts of conferences and each time you do,
there'll be more detailed.
- Perfect. I see Matt, you had a question in chat here.
I don't know if you want to come off mute
and ask that for the sake of the group.
- Sure. Hey Jim. - Hey Matt.
- [Matt] I'm just curious,
is this sort of an ongoing revenue stream
for conservation groups like TNC
when you've got these large holdings
or just getting familiar with how the stuff works?
- Yeah given the time I glossed over a lot of details here,
so great question.
The projects are generally broken
into 10-year crediting periods.
We'll go through a major reassessment of the carbon.
We have to make commitments to hold the carbon for 40 years
on Burnt Mountain and in Glebe.
So, and we could continue to generate credits
through that 40-year period.
That said the credit yield starts to really drop off
in the out years because then you're sort of at a place
where you're capturing growth only.
Will still be valuable and we'll have to make a decision
about how we're selling those.
So that we're really, at least me I'm looking
at this as like a 10-year income stream
with some maintenance revenue
and to help cover sort of the stewardship costs
of maintaining the carbon project going forward.
On the Family Forest Carbon, those are 20 year payments
to landowners and at that point the contract ends
and they'll have the opportunity to possibly renew
if the market's there.
- [Matt] Great. Thanks.
Interesting. Yeah.