The Consultant - 2018 - 26

CARBON OFFSETS

and is key to successful planning and decision making. Our
firm takes a conservative approach to feasibility, meaning an
accurate and realistic estimation of offset delivery and pricing
tempered against a full accounting of project development and
long-term operations and maintenance costs.
Project development. Once project feasibility has been established and a developer engaged, a project is listed with an offset
project registry. Listing a project, which is akin to obtaining a
building permit, requires submittal of information regarding
project type, location, ownership, forest types, and condition
and estimated performance to the registry to ensure the project
meets eligibility requirements. After listing, project development
hits the ground with the design and installation of a carbon
inventory. Carbon inventories differ from most conventional
inventories in that all standing above and below ground and
standing dead carbon stocks must be quantified. Further, data
must be collected in a manner that allows for the development of statistically defensible carbon stock estimates meeting
the protocol's demanding requirements and that prepares the
inventory for initial and long-term verification and monitoring.
Following carbon inventory, the modeling and project documentation phase begins. Inventoried onsite carbon stocks
are modeled and averaged over a 100-year project period and
then compared against the common practice stocking level for
the region. The difference between the project's onsite carbon
stocks during the first reporting period and common practice
stocking for the region equates to the project's initial offset
volume. Thereafter, annual offsets credited to the project are a
function of how a landowner manages their forest's net annual
biological growth. Growth retained in the forest may
be quantified, verified and sold as additional offsets
in subsequent reporting periods.
Project development next advances to preparation of the Offset Project Data Report (OPDR) and
project verification by an independent auditor. The
OPDR details all aspects of the project inventory and
modeling process, asserts the offset volume for which
the project is eligible and is the primary document
used for verifier and regulatory review. Like forest
certification, all offset projects must undergo initial
and periodic audits by an independent verification
body that is accredited by the California ARB. The
verifier conducts a comprehensive site visit to ensure
that inventory methodologies and field measurements
match the procedures and support the carbon volumes
asserted in the OPDR. A desk audit is also conducted examining the OPDR, ownership records, and other documentation to
ensure all protocol standards and procedures were followed. Full
field verifications are required every sixth year and desk audits
of OPDRs are conducted in intervening years when landowners
want the regulator to issue annual offsets.
Once a project has been successfully verified, an offset
verification statement (OVS) is issued to the project registry which serves as an intermediary between the project
26

development team and the regulator. The registry reviews the
OVS and then delivers all project documentation, including the
OPDR and OVS, to the regulator for final regulatory review.
Registration is the final phase of project development and results
in offsets being issued by ARB to the project owner. Under
California's offset program, an OPDR must be submitted to
the regulator every year attesting that the onsite carbon stocks
within the project area are being maintained in compliance
with the offset regulation and protocol.
Offset transactions. Compliance-grade offsets are currently
in high demand and offset marketing generally occurs well
before a project is registered and offsets are issued. As a commodity, forest offsets may be sold as they are issued by the ARB,
held for possible price appreciation or a combination of the two.
There is no commodity exchange for compliance offsets; rather,
all transactions are direct party-to-party, over-the-counter
(OTC) trades. Therefore, as with timber, it's incumbent on sellers to conduct their due diligence and secure knowledgeable,
experienced and impartial representation when negotiating
offset sales agreements.

FOREST CARBON PROJECT RETURNS
Like consulting foresters, offset project developers are frequently
asked to speculate on potential project returns with little property-specific data upon which to render an informed opinion.
While rules of thumb are scarce in the forest carbon industry,
having evaluated over eight million acres of U.S. timberlands
and developing more than 30 IFM projects on 2.5 million acres,
regional performance trends have emerged (Table 1).

Table 1. Characteristics of example registered Finite Carbon IFM
offset projects.

A fortunate and unique feature of IFM offset projects among
other offset types is that a large proportion of total project volume and revenue is front-loaded for most projects. This is due to
a conservatively managed property's initial onsite carbon stocking being above common practice, often to a significant extent.
Once a project is registered, annual offsets are a more modest
yield based on site productivity, growth rates and the amount
THE CONSULTANT

2018



Table of Contents for the Digital Edition of The Consultant - 2018

From the Executive Director End Notes
From the President ACF: Forestry, Fellowship and Value
Sharing the Stories of the Trees: ACF Distinguished Forester Jim Able
Maple Syrup: A Steigerwaldt Family Tradition
The South Carolina Chapter and Forestry Students
The Association of Consulting Foresters Celebrates 70 Years
Carbon Offsets: A Viable Opportunity for Forest Landowners?
Changes of Biblical Proportions
Forests for Fish In Michigan, Foresters and Anglers are Learning from Each Other
Case Study: Richland Township Woods, North Central Indiana
Invasive Species 101
Evaluating Forest Inventory Technology for Small Landowners
Choosing the Right Accountant or Tax Preparer
The History of Forestry in Ireland
The American Oak Project Midleton Distillery Creates Rare Irish Whiskey to Promote Sustainable Forestry
Products & Services Marketplace
Index of Advertisers
Why not Surround Yourself with the Best?
The Consultant - 2018 - Intro
The Consultant - 2018 - cover1
The Consultant - 2018 - cover2
The Consultant - 2018 - 3
The Consultant - 2018 - 4
The Consultant - 2018 - 5
The Consultant - 2018 - From the Executive Director End Notes
The Consultant - 2018 - From the President ACF: Forestry, Fellowship and Value
The Consultant - 2018 - Sharing the Stories of the Trees: ACF Distinguished Forester Jim Able
The Consultant - 2018 - 9
The Consultant - 2018 - 10
The Consultant - 2018 - 11
The Consultant - 2018 - Maple Syrup: A Steigerwaldt Family Tradition
The Consultant - 2018 - 13
The Consultant - 2018 - 14
The Consultant - 2018 - 15
The Consultant - 2018 - The South Carolina Chapter and Forestry Students
The Consultant - 2018 - 17
The Consultant - 2018 - 18
The Consultant - 2018 - 19
The Consultant - 2018 - The Association of Consulting Foresters Celebrates 70 Years
The Consultant - 2018 - 21
The Consultant - 2018 - Carbon Offsets: A Viable Opportunity for Forest Landowners?
The Consultant - 2018 - 23
The Consultant - 2018 - 24
The Consultant - 2018 - 25
The Consultant - 2018 - 26
The Consultant - 2018 - 27
The Consultant - 2018 - Changes of Biblical Proportions
The Consultant - 2018 - 29
The Consultant - 2018 - 30
The Consultant - 2018 - 31
The Consultant - 2018 - 32
The Consultant - 2018 - 33
The Consultant - 2018 - Forests for Fish In Michigan, Foresters and Anglers are Learning from Each Other
The Consultant - 2018 - 35
The Consultant - 2018 - 36
The Consultant - 2018 - 37
The Consultant - 2018 - Case Study: Richland Township Woods, North Central Indiana
The Consultant - 2018 - 39
The Consultant - 2018 - Invasive Species 101
The Consultant - 2018 - 41
The Consultant - 2018 - 42
The Consultant - 2018 - 43
The Consultant - 2018 - Evaluating Forest Inventory Technology for Small Landowners
The Consultant - 2018 - 45
The Consultant - 2018 - 46
The Consultant - 2018 - Choosing the Right Accountant or Tax Preparer
The Consultant - 2018 - The History of Forestry in Ireland
The Consultant - 2018 - 49
The Consultant - 2018 - 50
The Consultant - 2018 - 51
The Consultant - 2018 - The American Oak Project Midleton Distillery Creates Rare Irish Whiskey to Promote Sustainable Forestry
The Consultant - 2018 - 53
The Consultant - 2018 - 54
The Consultant - 2018 - 55
The Consultant - 2018 - Products & Services Marketplace
The Consultant - 2018 - 57
The Consultant - 2018 - 58
The Consultant - 2018 - 59
The Consultant - 2018 - Index of Advertisers
The Consultant - 2018 - 61
The Consultant - 2018 - Why not Surround Yourself with the Best?
The Consultant - 2018 - cover3
The Consultant - 2018 - cover4
The Consultant - 2018 - outsert1
The Consultant - 2018 - outsert2
The Consultant - 2018 - outsert3
The Consultant - 2018 - outsert4
The Consultant - 2018 - outsert5
The Consultant - 2018 - outsert6
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