Establishing a Voluntary Carbon Offset Market in the State of Georgia

Timothy Sterling August 2^nd, 2024

Introduction

A special thanks to the �Drawdown Georgia Business Compact

Project Sponsors

Introduction & Background

Phases 1-3

Phase 2: Key Takeaways

Phase 3: Application to Georgia

Conclusion & Discussion

Phase 1: Successful Projects

Table of Contents

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• Compliance vs. voluntary
• Components of a VCM
• What is a “High Quality Offset?”
• Key Terms

• Appalachian Carbon Exchange
• Green Trees (Mississippi Alluvial Valley)

• Back Casting Approach
• Project Methodology

• How can we ensure a platform �for everyone involved?
• Role of marginalized landowner community
• Seeing the landowner eye to eye

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• Wrap-up points
• Role of DDGA Business Compact
• Challenges & Future Outlook

• Themes of success

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Voluntary vs. Compliance Market

• Voluntary market allows freedom in participation (Carbon Credit Participation)

- Independently run by carbon management and registry organizations�

• Compliance market is enforced by a regulatory entity (Cap & Trade)

- Limit on emissions (i.e. ”cap”)

- SEEM class simulation

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3^rd Party Verifier

Policy-Maker

Buyers & Sellers

Carbon Developer

Carbon Developer

Landowner

Key Components of a VCM

Ensures accuracy in projects and helps with monitorization process during the project’s lifespan

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Governmental entity that establishes criteria and oversight of the VCM

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Companies looking to decarbonize their emissions further through project involvement

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Establishes projects, works with landowners, registry, buyers & sellers to generate credits

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Develops protocol, tracks projects, and issues credits

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Holds rights of land ownership. Works with developer for carbon management and credit

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Examples of Carbon Registries & Developers

* Registries are utilized by the multitude of developers around the country and world

High Quality Offset

• A carbon offset cultivated with the most assurance of the carbon reduction/avoidance�
• Typically utilizes satellite imagery to ensure accuracy along with rigorous standards for certification

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Deforestation Avoidance

Value Spectrum of Credits

Lowest valued carbon credit. Protection of already established forest

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Existing forestland becoming more proactively managed

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Active Forest Management

Planting trees in an area that was not previous forested land

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Afforestation Projects

Increasing biodiversity by cultivating native forests and restoring them

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Afforestation & Reforestation Projects

Key Terms

Phases 1-3�(Back Casting Approach)

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Back Casting Approach (The Natural Step)

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1. Envision the desired outcome

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• Due-diligence of study & review�
• Pinpoint what success looks like�
• Plan to achieve vision

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Source:�Our approach: The natural step framework. (2019). Retrieved from https://thenaturalstep.org/approach/ �

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3 Phase Project Structure

Phase 1: Successful Projects

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* Mississippi Alluvial Valley (Green Trees)

Appalachian Carbon Exchange & Finite Carbon

Backstory

• History of successful reforestation intervention between Appalachian Carbon Exchange and Finite Carbon in 2016
• Developed the “Tennessee River Gorge Trust (TRGT)”

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Successful Project Highlighted

• 2021, looking to replicate success in the southern Appalachia Area
• Utilized American Carbon Registry (ACR) “Improved Forest Management” protocol (IFM) to assemble a cohort of local landowners and buyers in the area (landowner equity)
• Implemented thorough historical review to understand the area and the ecological implications
• Established a successful VCM consisting of local landowners conglomerated

Green Trees and Norfolk Southern

• Mississippi Alluvial Valley devastated by habitat destruction and deforestation�
• Norfolk Southern intervention with Green Trees to plant 6 million trees (mixed native hardwoods) across 10,000 acres of land in the area; “Trees & Trains Program”�
• Led to the restoration of, “the nation’s largest watershed and a vital wildlife habitat” (Norfolk Southern, 2024).�
• Generation of 1.1 million metric tons of carbon sequestered, equivalent to nearly 1.2 million carbon credits�
• Local economy local farmer focus (i.e. new revenue stream of just planting trees)

Phase 2: Key Takeaways

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Key Takeaways

Due-diligence to incorporate local aspect

Role of the carbon management company is critical

Utilized native plant species; restraining from a species monoculture

Phase 3: Application to Georgia

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The Ecologist �Perspective

The Business/Economic Perspective

The Landowner Perspective

Role of DDGA & Nonprofits

Ensuring a Platform for Everyone

Stakeholder Interviews

Carbon Pricing Index Map

Carbon Pricing Index Land Rent (USD)

Carbon Sequestration Rates per Acre

Family Forest Carbon Program

• American Forest Foundation; Utilizing Verra’s Carbon Standard

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• “The Family Forest Carbon Program pays small forest holders upfront to implement climate-smart forestry practices that go above and beyond what is otherwise common practice”�
• Puts the landowner’s needs first for project engagement�
• Direct support with AFF’s “Field to Forest Program”

- Guaranteed annual payments to convert open fields to forests

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Conclusion and Discussion

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The Ecologist �Perspective

The Business/Economic Perspective

The Landowner Perspective

Role of DDGA & Nonprofits

The Role of DDGA Business Compact

Challenges

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• Scope of this project; much to consider and depth in detail capacity (even for this presentation!)�
• Distinguishing which carbon registry is the best for the southeast region; �each registry has pros and cons, with many having massive scrutiny in academic review�
• Introduction of a new state VCM; many investors turn to global market�
• Ensuring revenue streams for landowner; having the capital and enough alternative options for income (i.e. selective harvesting, hunting licensing, etc.)�
• Conducting highest quality forest management practices; difficult to do on widespread scale�
• Public perception of carbon credits; scrutiny in the media (example: REDD+ international over crediting)

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Future Outlook

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• Continued efforts for validity; constant revisions to policy (SBTi, SEC, etc.) and methodology approach for registries�
• Increased push for landowner involvement; family carbon programs & continued discussion around landowner communication (DDGA forest carbon workshop)�
• More work to be done for estimated carbon price index; specific price projections could be helpful for the projected credit value increase by 2030�

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* Hope for an innovative solution that brings together many types of stakeholders *

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Thank You!

CREDITS:

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