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Using the forest as carbon storage - and get payed for it?

Started by Nils Jonsson, January 20, 2021, 03:03:53 AM

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Walnut Beast

Quote from: Magicman on June 22, 2022, 04:41:12 PM
Robert, go to the NCX website.

Yippee !!


 
Here is a copy of my first check for 115 (Pine) Harvest Deferral Units X $17 per unit = $1,955 net $1,818.15.

This year Hardwood was included and mine figured @ 738 HDC's X $8 = $5904.  
Hope you read everything in the fine print and they didn't lay any form of claim against your land in anyway since they paid you and you cashed the check 

rusticretreater

NCX sells the credits on the open market to large corporations who have onerous government regulations to contend with.  As long as they can procure the credits at a price less than what it costs for them to change operations or less than the fines levied, they buy them.  NCX can calculate their value, secures them from you and brokers them at a hefty profit.  The logic behind how they are created is in regards to sustainability, not increasing carbon sinks.

What sometimes gets missed is that even though the trees wont be cut down anyway, each year they soak up the carbon dioxide.  This absorption is what you are selling.  Corporations claim this absorption to offset their emissions.  
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Prizl tha Chizl

I think it's (somewhat) important to see where and how the government and corporations are and are not linked in this. If you sell your carbon credits because "the man" taxes  you, it's not your tax money you're getting paid back with, rather, as rustic retreater notes, it likely comes from a corporation who is getting their arm wrung (by the gov.) as a way to get them to go green or pay up.

I don't like it mostly because it's useless. Most woods receiving these funds weren't gonna harvest anyways, so they're not actually creating any "new" carbon sinks, which is what they purport to be selling, not the carbon or ups are already going up regardless.

 Whether or not you want to accept the money they're squeezing out of the big guys is then a personal choice, I don't care for them, but it's not worth enough for me to go out of my way for it at this point.
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YellowHammer

I've got no love for the big corporations paying the money, most likely they are the ones who lobbied to have the carbon credit exchange scheme in place to begin with.  I guarantee they are not losing money on these deals, they are prospering.  

I liken it very similarly to wetlands management.  Years ago we were about to buy a decent sized hunk of land for future sale as a subdivision.  However, about 10 acres were a swampy mess, and supposedly we couldn't touch it, because it had been classed as a wetlands by the government.  We couldn't do anything with it, and calling it a wetlands was a joke, as it was a low swamp hole between several existing subdivisions.  A duck had not landed on it in a decade or two, and it dried up in the summer anyhow, so even the frogs died during the summer, I assume.  Well, that 10 acre untouchable piece killed the whole deal for us, we didn't buy it, and moved on.

Years later, we drove though the area and there were houses and fences, sidewalks, and streets popping up.  I knew the developer and asked him how in the world they got around the wetlands issues.  He laughed and said they did a wetlands exchange, or drain one swamp because they bought equivalent value acres of swamp somewhere else.  Buy a swamp, drain it, put up quarter million dollar houses, and offset that by purchasing equal acres of inexpensive swamp somewhere else.  Then drain that one, put up more houses, make a ton of money, and do a wetlands exchange for another worthless swamp.  Basically, a way to get land real cheap, and later sell with houses on it, all the while purchasing a future swamp cheap to turn into a subdivision.

I bet a similar thing is going on here, the government put some laws in place with little thought, the big corps lobbied for this strategy, and now they can do this.  They are not losing money on it, I bet they are paying fair value to them, as I guarantee they are getting windfalls and "green dollars" from the exchange, and to them its good business, because they would rather pay these credits on parcels of land they don't operating on vs land land they perceive as more beneficial to their corporation.  I would say that it's a safe bet that they are not losing money at all, but conversely, they are using this as an acquisition strategy, just like the wetlands example.

My only surprise is that some of the contracts are only 1 year long, as that is really too short of a time for a big corporation to do a real acquisition strategy, so it tells me they are buying and selling these shorter contracts as surplus or in excess of what they really need to offset their true government requirements.  Basically, they are marketing these shorter contracts as "bonus" parcels to be stockpiled for futures offsets.  

This is just speculation on my part, but I've been in government long enough to see how these things work, and this smells the same as other things I've seen.

Anyway, I'm sure Magicman has done his homework on this, and looked at the fine print on the contract.  Also, I haven't seen anything to suggest there are hidden liens on the contracts I've looked at so far.  There is a lot to unpack here, however, and I would also assume that as "green Earth" becomes more the mantra, the contracts will only increase in value in the future.  Government regulations do not away, so this is most likely a long haul program.

I think there is also a landowner perception issue, as just because someone doesn't plan to harvest trees or disturb the carbon production on their land doesn't mean that land is valueless to others, it just means that particular value was unrecognized until now.            
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

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Sawing is fun for the first couple million boards.

Be smarter than the sawdust

kantuckid

Quote from: Prizl tha Chizl on July 26, 2022, 04:13:07 AM
I think it's (somewhat) important to see where and how the government and corporations are and are not linked in this. If you sell your carbon credits because "the man" taxes  you, it's not your tax money you're getting paid back with, rather, as rustic retreater notes, it likely comes from a corporation who is getting their arm wrung (by the gov.) as a way to get them to go green or pay up.

I don't like it mostly because it's useless. Most woods receiving these funds weren't gonna harvest anyways, so they're not actually creating any "new" carbon sinks, which is what they purport to be selling, not the carbon or ups are already going up regardless.

Whether or not you want to accept the money they're squeezing out of the big guys is then a personal choice, I don't care for them, but it's not worth enough for me to go out of my way for it at this point.
I mostly agree with you, but like Magicman I'll gladly take the money even though the "scheme" is a woke joke and more than I can say here.
I didn't go "out of my way" as long as what I've had to say in this thread took to type :D few minutes on the NCX website plotting our land parcel from Google earth. I'm sure it's taxable income when you cash the check. making the business into something larger than it is, that's silly. It's silly enough on it's own lack of overall merit?
The VT plan above sounds like it's more (sort of) forestry based but also the result of who moves to VT from NYC, etc..
IMO: The plan came about through negotiations as a means to negate what the government dictates to corporations r.e., emissions. Those same laws or executive orders are an effect on much that American business lives with. Guess why certain power plants can only operate for certain lengths of time while brownouts are predicted as we speak. The alternative to having large corporations is seen in China under Communism, is that a great alternative? 
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Southside

I am curious what happens in the VT program when land trades hands through sale, inheritance, etc. Do the restrictions remain? Will this increase housing pressure on urban areas? Will it increase harvest pressure on non enrolled stands? Law of unintended consequences, 20 years is a long time. 
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kantuckid

Great question as it infers the potential influence of the many "outsiders" who have and are still moving into New England states. In Ky, the ominous mineral rights ownership issues of the past still remain, long after books like, "Night Comes to the Cumberlands" told the evils of the Broad Form Deed which tied up mineral rights and sometimes timber rights on much of the Appalachian lands. 
Protecting our forests is great if it doesn't mean loss of individual property rights. My county land area is 58% national forest so much is already locked up here by the government. 
I wonder if the loss of coal severance taxes in Appalachia will lead to something involving carbon credits? In a manner of speaking it already does since much of our timber is owned by the same folks (steel & coal & timber companies) who still own the minerals rights and much of the land here, along with the government. Can politicians (who are always seeking more money) find a way to sell carbon credits from taxpayer owned forests is yet another question. 
As we who've paid the taxes on our land for nearly a half century-we'll gladly take the carbon credits money! I see it as sort of a tax refund. 
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YellowHammer

I wonder if at some time the government can "appropriate" the carbon credits of privately owned land? 
YellowHammerisms:

Take steps to save steps.

If it won't roll, its not a log; it's still a tree.  Sawmills cut logs, not trees.

Kiln drying wood: When the cookies are burned, they're burned, and you can't fix them.

Sawing is fun for the first couple million boards.

Be smarter than the sawdust

kantuckid

I'd answer yes, in a manner of speaking, based on they are who created the laws/regs that made them become an "item" to begin with. Back when our government was not broke, they "acquired" lots of private lands. I guess some would argue that we all own lots of carbon credits via public lands. 
 
Google: "Can the government appropriate private land?" and the answer will be eminent domain. Reminds me of back in KS when the Corps of Eng. began to build lakes all over and some people refused to leave their homes & farms. Same for the Interstate hwy system. Also happened when the dam building took place during the depression.  
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woodroe

Just got my carbon credit evaluation from NCX.
22 Acres dense forest worth 37 credits @ going rate of $9- 9.50 per credit. 
Is a decent pay back for not cutting for one year seeings I'm stocked up on firewood for almost 3 years.
All that 30 yrs. of forest management may pay off after all. My better half is reading the fine print now although I'm ready for the property tax break of $300-350 yr throwing that money at it..
Skidding firewood with a kubota L3300.

twar

I got my evaluation yesterday as well; 180 credits for 66 acres of young lob-ly pine and mixed hardwoods in the NC foothills. At the going rate, this will more than pay the property tax. I too am reading the fine print...this seems almost too easy.

kantuckid

Mine says 313 credits for 89.5 acres. I have not sent them anything yet as not time to fill it out for few days. I'm left to wonder what happens if you overprice your bid based on their averages using an aerial photo, not an actual timber cruise?
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kantuckid

I got my credits as 313 based on 89.5 acres of forested land. I do wonder what I should bid based on their data averages from a summertime aerial view and no having done a timber cruise of my mature timber stand. I've sent them nothing so far.
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Magicman

The buyers use the same data that you have.  If you bid too high, then you might not get a buyer.  My bid was low and the buyer paid me more than my bid.  NCX will get the highest $$ possible for your credits because the more you get, the more they make.  It's all about the $$.
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Stephen1

I am looking into up north. I do not see why you would not sell carbon credits for the standing timber. I realise that it might be worth more to sell the timber, but if you receive money each year for not logging, and you didn't plan on logging it seems like a great idea to pursue. Corporations take money all the time, ie: grants, and have no regrets. Look at the pandemic, government money was flowing in rivers into big corporations bank accounts, some had the best profits ever. I didn't see them saying ohhhhhhh we shouldn't do this. Nope, thy said, how do we get more!
I am a managed forest, of which all I have to do is not clear cut. I can have trails, make maple syrup, and practise good forest management.  For that I receive a tax break on my land of %70. A no brainer, the less money I give the government the better I feel. 
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SwampDonkey

As to tax on forest, I'm paying next to nothing on 70 acres of fully forested land. 70% off of $27 tax isn't much kickback.  :D It was funny this spring was announced 20% tax reduction on forest land. The ill informed said those Irvings are getting $millions in kickbacks. Not even close since forest land is assessed way low to start with. :D
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rusticretreater

I signed up with NCX to give it a go.  I only have 11 acres but they said I qualified at 18 carbon credits.  They say sales are made on Thursdays and you have to have everything ready(docs) by Wednesday COB.  All online, autofilled .pdf files and Docusign signatures.

While information on the site relating to sales is sparse, they did have a summary listing of last sale price and average sale price.  It was at $9 when I submitted my offer for sale so that is what I priced at.  No sale that Thursday.

So I went back to the site and saw the average price was still $9 but the last sale was listed as $7.  So I submitted an offer at $7.  I got a sale notification on Thursday at $9!  So I am due $162.  It ain't much, but its pretty much free cash.

Also it is August but the contract is dated for October 2022 to September 2023.
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Magicman

That seems in order to me.  You should get paid toward the end of Dec, '23 or the first of Jan, '24.
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It's Weird being the Same Age as Old People

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rusticretreater

A whole year and then some? Shucks, darn and rats!  Good timing though. Right in the christmas & tax season. Here today, gone today.
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Magicman

My contract is April 1st through March 31st, and my check was dated June 16th.  This was detailed beforehand and I was kept well informed. 
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It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

kantuckid

I got a carbon credit estimate from NCX for our acres which was broken down into 86 acres qualifying with 213 total credits available to market.
Their figures give far large carbon credits for the softwood portion which is in fact only about 6-7 acres I planted in alternating rows of pine around 1996, with the rest in mature hardwood timber. The pine is far from marketable size and the timber is quite large and valuable White, red, black and chestnut oaks with very large poplar and some ridge hickory and oak too. 
So I sent them a question as to how my very small pine plantation could yield so much more carbon capture than most of the forest acres and got a meager response saying that it is what they say it is, no real response as such. 
I got another recent message suggesting they now have far more land owners who've responded than the market to buy the credits, thus I'm wondering if I'll get anywhere near what our land might have gotten a few weeks ago when they kept sending emails to sign up. 
Sounds almost like a bait and switch as they first say $9 then only a few weeks later it's a don't expect so much email? Maybe it's the faltering economy?
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Magicman

I would not describe it as a "bait and switch" but more of a limited market where the supply has exceeded the demand. 

I have a good friend that dilly-dallied around sending emails trying to get the highest bid and to my knowledge his still has not sold.  This year I did the same as last year, I offered mine at the lowest bid amount ($6) and got more ($8) than my offer.

Since more and more landowners are offering their acreage, it will become a buyers market (apparently already has) and I will be satisfied if I get $2 next year.  
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It's Weird being the Same Age as Old People

Never allow your "need" to make money to exceed your "desire" to provide quality service.....The Magicman

woodroe

My submitted proposal was the current selling price at the time of $9 per credit
6 weeks ago at least. No takers yet.
For $3- 350 a year its really no big deal for me either way
but I did get a green tonnage and saw log assessment out of it so far.
They did send me a e-mail thanking me for my patience while they drum
up more buyers.
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IndiLina

On NCX, there is currently a surplus of almost 600,000 credits listed for sale at the $7 price point. Bottom falling out of the market. 
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kantuckid

Perhaps I poorly described my results when I sent them an email.  I was hoping for some explanation as to how my 6-7 acres of 25 yr old pines they gave me more credits than did over 12 times as much mature hardwood? What I received was more like a canned response that said nothing substantive. I realize that not all trees give the same potential but far from knowledgeable as to how they calculate the credits. 

In the interest of learning more about carbon credits I just googled: "Who buys carbon credits from forest owners?" and see that there are many facets to the topic. I've read very little but plan to give it a try next rainout day that comes along.
 One clear result was that we can offer our forests to several potential marketers besides NCX. wwwlightfootresources.com is the first hit on google. Lots to read there.  
 
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