Carbon Credits Made Simple

[pursefattener]

Could someone explain how carbon credits work to the benefit of say, a forestry company who buy up large acreages for plantations?

Can a investor who owns farm land with some small areas of bush registar for carbon credits?

There is talk of carbon credits driving farm values in SW Vic. Certainly values have risen substantially of late.

What is carbon credit trading??

Shawn

 

[coastymike]

Carbon credit trading could be an interesting development but I recall Macquarie Bank at one of their briefings in Forestry Products mentioning that international trading of carbon credits wont formally commence until 2008. This is going from memory recall so I could be entirely wrong.

Basically the premise is that individuals or corporations will get credits for reductions of emissions or absorption of carbon. I think there is some body being established through the State Forests of NSW for accounting for these carbon credits and you get issued with a certificate which will then be able to be traded.

I dont know the ins and outs of how it will all work but it does sound like an interesting development in a new trading commodity. I also recall them mentioning that this is something which will possibly be traded on the Futures Exchange similar to wheat, wool, etc.

 

[Doons]

carbon credits

There have been a number of articles on line in the lasts few months. Do a google seach and see what comes up. I have done a little research for a potential investment but it was awhile ago and we didn't proceed so my files aren't current.
If you can't find much searching carbon credits try geosequestration (I think thats how you spell it)...interesting subject....
It is amazing how many ways we are trying to reduce emissions, not sure why we can't do more solar etc...but then there is always nuclear which is causing quite a stir at the moment....

 

[andymack]

Carbon credits can be interesting from a forestry perspective. The NSW government has facilitated the trading of credits in some fashion such that there is at least one company which will pay landowner for the carbon credits of there forest.

The catch is that you have to lock up the carbon you traded for a 100 years (which means you sell the property with a covenant). This is ok for somebody who is either leaving the bush alone or is setting up a sustainable tree plantation. It is not useful if you are going to clear fell.

 

[andymack]

To answer "what is carbon trading" from a foresters point of view.

Is where a company is willing to pay the Forest owner for a certain amount of carbon (by the tonne) in live trees to be kept for a 100 years. This company is most likely a CO2 emitter as in a power station etc. The idea is that he can emit CO2 and pay the forest owner to keep trees to absorb CO2. The consequence to the forest owner (I believe) is that he gets no loss of use of the land or forest but he must maintain the tonnage of live trees he's contracted to. It is a once only payment.