Carbon Assets

Through the process of photosynthesis, individual trees and forest communities around this planet remove carbon dioxide from the atmosphere and through a chemical process science refers to as the Calvin Cycle, combine it with water, and build a 6-carbon sugar compound called glucose. During this process, the tree releases oxygen back into the general atmosphere through gas exchange valves, called stomata, which are usually located on the underside of the leaves and needles. Thus, trees are referred to as ‘the lungs of the planet’. A portion of these sugars are stored as cellulose (i.e. wood fibres) in the woody portion of the tree. The remainder of the sugar compounds are broken down into energy compounds through what science calls the Krebs Cycle. These energy compounds- ATP, NADP, NADPH are translocated throughout the plant. Carbon in the cellulose is stored throughout the tree- from roots to buds.

Is carbon additionally stored in forest soils?

Sure, and agricultural soils as well. Carbon stored within the different soil horizons is essential.  Carbon plays a critical role in soil health. It increases water holding capacity and infiltration rates. It reduces invasive weeds and disease incidence. Soil carbon increases biodiversity as well as improves the plants’ ability to uptake and utilize micro- and macro-nutrients. It decreases potential erosion and soil loss to overland flow.  It also holds on to water like a sponge, thus reducing the amount of water needed for irrigation. When we calculate how much carbon a wooded area can sequester and hold as a reservoir, we consider the complete ecosystem: the standing dead, the shrub layer, the soils, and the dead woody material on the forest floor. Imagine a temperate forest of maples and ash trees, where their leaves fall to the ground every autumn. Some of that forest carbon in the leaves is returned to the soil as they decay, ensuring a stable soils carbon flux over time.  However, a portion of it also returns to the atmosphere. When trees die and fall to the forest floor, tons of that woody material also decompose over time and return to the atmosphere as part of the global carbon cycle or percolate into the soils as a long-term soils carbon component. 

Soil carbon comprises 50 -70% of the total carbon assets in temperate and in the cooler boreal forests. Hence, small changes in soil carbon can have significant impact on ecosystem carbon storage. Soils constitute the largest terrestrial carbon pool, containing as much as 2,344,000,000,000 (2.344 gtonnes) tonnes of basic carbon (C) to a depth of 3 meters.  Forest soils, especially, contain more than double the amount of carbon than above ground biomass. Most carbon registries assume that management activities have little or no effect on soil carbon stocks if site preparation activities do not include mechanical site disturbance of more than 25% of the area. However, research has shown significant sequestration rates for temperate forest soils with rates ranging as high as 4.8 tonnes of CO2e /acre/year. (1.3 tonnes of carbon). Although soils carbon stocks accounted for nearly 48% of all forest carbon, they contributed only 2% of the total sequestration. This suggests that soil carbon stocks are relatively stable, and this apparent lack of change may be the result of losses (from management activities) and gains (from increased growth).  

Carbon assets (nonfungible or intangible assets) comprise:

●       Above-ground ecosystems that are assets that generate offset value (CO2e)

●       Offsets (carbon credits)

●       Below-ground ecosystems that are assets that generate offset value, also.

Intangible assets are non-fungible assets that are not visible, can’t be physically measured  or held and that create value over time simply by their existence. 

The de-carbonization transformation will be an extended and complex process. It requires a value to be placed on carbon. Whether that value be a government mandated value (e.g., a tax on carbon) or a market driven value (e.g., a market-based trading system), it requires societies and cultures- individuals and corporations to evolve from ‘excessive investment in high emissions’ to ‘high investments in low emissions’ processes. Without effective pricing or a valuing mechanism, it will be difficult to manage carbon emissions. Carbon asset management is the key to regulating carbon emissions. It measures, verifies, and appraises carbon assets throughout the chain of ownership. However, global investment in carbon asset management is lagging behind what is needed to adequately portray forest carbon sequestration as a viable climate solution.  

Global Forest Resources facilitates the transaction of carbon assets, working with national and international markets and various network of worldwide buyers to offset their emissions. We help our customers obtain a fair market price for their offset credits, structure portfolio transactions, construct modern financing solutions, and retire credits. 

Our offerings for carbon buyers consist of :

●       Due diligence on sellers and processing transactions.

●       Risk-free analysis and transparent trades.

●       Evaluation of sustainable development contribution of carbon offset projects.

●       Structuring portfolios of voluntary and regulatory carbon offsets from developing countries.

●       Developing appropriate Emissions Reductions Purchase Agreements (ERPA’s). 

Our offerings for carbon sellers encompass :

●       Spot and forward transactions of multiple year offset vintages.

●       Market appraisals for offsets through auctions and competitive bidding.

●       Developing Emissions Reductions Payment Agreements (ERPA’s), contracting, offset transfer, and facilitating payments.