Companies and organizations are buying and selling billions of dollars of carbon credits every year worldwide. Carbon credits are a financial instrument that packages one metric ton of carbon dioxide into a commodity that can be traded. For example, if a company participates in a required, or even voluntary, cap-and-trade system and has exceeded the annual quota for their carbon dioxide emissions, they can purchase a credit from another organization that has excess credits. Credits sometimes come from carbon offset projects, which are explicitly designed to sequester or reduce greenhouse emissions in a verifiable amount.
Carbon credits and offsets are verified by 3rd party organizations, who root their evaluation in standards and protocols. Registries verify the amounts of carbon bought and sold, as well as the projects actively sequestering or reducing greenhouse gases, and help package the credits or offsets. Exchanges are marketplaces where credits and offsets are traded. Typically, credits and offsets feature renewable energy, energy-efficiency programs, the capture of methane or other pollution, or the expansion or protection of forests.
But now, a few start-up organizations are trying to figure out to how to make it easier for cities across the country to turn the carbon stored in urban forests into credits and offsets. If well-designed, implemented, and monitored, these new models have the potential to provide new revenue streams for strapped urban parks systems, protect existing green spaces from development, and bring more greenery to our cities and suburbs.
These organizations seem to build on the work already being done to monetize the carbon in urban forests in California — which has had an established, required cap and trade system since 2011 — spreading these ideas across states and cities where there are nascent markets. (It’s worth noting: after years of dysfunction but recent success, debate still rages on the effectiveness of California’s cap-and-trade system).
City Forest Credits, based in Seattle, is a registry that has developed a “unique bundled credit” — that goes beyond just packaging carbon. Each credit includes “a metric ton of CO2; stormwater runoff reduction in cubic meters; air quality for O3, NOx, PM10, and Net VOCs; and energy savings in kWh/yr and kBtu/yr.”
City Forest Projects makes the case for their approach: projects are “implemented locally, with visible and quantified ecosystem benefits.” Furthermore, individuals, companies, and organizations can purchase credits in their own communities, keeping benefits local.
They’ve developed their own protocols for measuring the benefits of their credits. And on their website, they claim they have solid leads with a number of cities, including Austin, Texas, and Pittsburgh, Pennsylvania to turn urban forests into credits that can be traded.
For example, “we are beginning to work with urban forest stakeholders in Austin to assess larger-scale urban forest carbon projects that could generate significant volumes of CO₂ storage.” And in Pittsburgh, “a group of conservancy organizations has been working for over four years to preserve from development a large, 660-acre parcel of forested land in the City of Pittsburgh. We have had detailed discussions with the groups as they work to preserve not just the land, but the trees as well. A preservation carbon project could help preserve the trees, generate revenues for maintenance, demonstrate stewardship, and keep the many benefits of trees for the residents of the city.”
While City Forest Projects still seems to be formulating their approach and finding a market for the credits, Urban Offsets, another organization, appears to be farther ahead.
Their model is a bit different from City Forest Project’s. They package already-existing “high quality carbon offsets,” which have already been verified by registries, further evaluate the credits according to more than 50 criteria, and then bundle these offsets with “community tree programs.”
Urban Offsets makes the case for their approach: “Our unique offering involves the bundling of purchased third-party verified carbon offsets with tree plantings in local communities. This methodology presents a one-two punch against the traditional methods of offsets. Our model gives you the best of everything: local trees with proven ROI and positive impact that truly reduce carbon emissions.”
Urban Offsets is now partnering with urban tree planting organizations in New York City, Atlanta, Phoenix, Tempe, Charlotte, Durham, Greensboro, St. Louis, and Fayetteville. In New York City, they are working with Bette Midler’s well-regarded organization, the New York Restoration Project, and in Charlotte, with TreesCharlotte. They state these organizations are ensuring the trees are well-maintained.
It’s important that the trees underlining these urban forestry-based financial mechanisms are in good health. Given the high mortality rates for urban street trees, maintenance needs to be guaranteed to ensure the credibility of urban forests as long-term financial assets.
Much of Urban Offsets’ efforts seems driven by demand from Duke University, and their carbon offsets initiative. The Ivy of the South seeks to be carbon neutral by 2024. To meet that goal, Duke University will need to “offset approximately 185,000 tons of carbon dioxide equivalent-emissions per year.” Urban Offsets is the “exclusive” provider of urban forestry offsets for Duke.
Boosting both the supply and demand for urban forestry credits and offsets is then critical to creating the market — and ultimately benefiting the tree planting non-profits, conservancies, and park systems that could really use the extra revenue.