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POWER CONNECTIONS
Real Money Trees
By Carol Moczygemba
Whether or not you agree that we are experiencing global climate change, it’s a political reality. There’s an ongoing debate about the best approach to regulating “greenhouse gases,” such as carbon dioxide (CO2), that occur naturally in the earth’s ecosystem, but increasingly come from the burning of fossil fuels, such as coal.
One method for regulating CO2 emissions is carbon sequestration, the capture and storage of CO2. Although there are many very expensive technologies that can accomplish this goal, one is available right in our own back yards.
Trees naturally take in and store carbon dioxide as part of photosynthesis. As agents of carbon sequestration, forests of young trees, which grow in abundance in East Texas, are candidates for eligibility as “carbon credits.” Each credit represents a single metric ton of sequestered CO2.
The Texas Forest Service was recently approved as the first state forestry agency in the nation authorized to verify carbon offset projects, the first step toward landowners’ participation in a carbon exchange program. Landowners then work with an aggregator on the price to be paid per carbon credit. That price, just as with cattle or corn, will change with market conditions.
Last December a carbon credit was worth about $1.85. But last April, the value was up to $4. The European price is $30 because of tighter restrictions on carbon emissions.
The financial institution that sanctions aggregators is the Chicago Climate Exchange® (CCX), which facilitates trades much like the stock market. The CCX was founded in 2003 by several corporations that agreed to reduce their carbon emissions by 6 percent by the end of 2010. If their reduction efforts fall short of this and their interim goals, they can purchase carbon credits at the CCX to offset the shortfall.
Last September, a number of aggregators came to the Texas A&M University Agricultural Research and Extension Center in Overton to convince a gathering of mostly East Texas landowners that there is economic opportunity in climate change for those who own trees. East Texas, with its millions of acres of piney woods, is a prime destination for carbon credit entrepreneurs.
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SIDEBAR: CARBON CREDIT PILOT PROGRAM
Under a Carbon Credit Pilot Project involving the Chicago Climate Exchange, AgraGate Climate Credit Corp.—solely owned by the Iowa Farm Bureau—and local aggregators, forest landowners who meet certain conditions can receive payments for carbon stored since 2003, as well as annual payments through 2010.
Forest landowners who meet the following criteria should consider participating:
• Have planted pine on open land since January 1, 1990.
• Have a minimum of 250 pine trees per acre.
• Are willing to commit to maintaining 250 pine trees per acre.
• Do not plan to harvest or thin trees until 2011.
• Understand that some or all income may have to be paid back in case of a disaster event or a rule change/clarification.
• Are willing to accept the shortcomings of a pilot program.
For more information, contact AgraGate Climate Credit Corp.’s office in West Des Moines, Iowa, at 1-866-633-6758, or its representative in Texas, Gary Clos, at (936) 465-1736.
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Carol Moczygemba is executive editor of Texas Co-op Power.
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