Green Horizons

Missouri's diverse forests provide significant economic opportunities in the wood products and tourism industries and for hunters and fishermen. Now, forest landowners can earn a new source of income from their forest landscape: payments for carbon stored by growing trees.

Forest landowners can gain access to the carbon market by enrolling in a new service provided by Dogwood Carbon Solutions, an enterprise that links Missouri forest and grassland owners with the emerging market for carbon storage (or carbon sequestration). Payments are made possible by Dogwood Carbon's relationship with the Chicago Climate Exchange (CCX).

Founded in 2003, the CCX is attempting to provide a marketbased mechanism for reducing greenhouse gas emissions. Large-scale greenhouse gas producers (energy companies, paper mills, factories, etc.) voluntarily participate in the CCX as carbon credit buyers. These companies look to landowners, farmers and other carbon sequestering projects as carbon credit sellers to offset greenhouse gas emissions. Carbon credits are traded between buyers and sellers on the Chicagobased CCX much like soybeans and pork bellies are traded on the Mercantile Exchange.

"Missouri's forestlands are one of the most valuable carbon storage buys on the market," says Dogwood Carbon's Jake Davis. "On a per acre basis, Missouri forests owners are in a solid position to earn a significant amount of income from the carbon credit trading system."

At this time, eligible timber stands include trees that have been planted since 1990 or reforested areas through natural regeneration.Forest landowners are paid through a formula based on species and age of their timber stand multiplied times the price of carbon on the CCX.

• Missouri hardwoods currently average $18 per acre, per year.
• Pines and softwoods younger than ten years old are currently worth $9 per acre, and pines planted since 1990 but older than ten years are worth $30 per acre.
• Participants will be paid once per year and the price will move slightly up and down dependent upon the price of carbon.
• Dogwood Carbon deducts their brokerage fee (10% of the annual contract amount to cover trading costs) from the annual payment.

In the next four to six months, uneven-aged management, timber stand improvement and other sustainable forest practices are all expected to become eligible for certification and participation.

Dogwood Carbon certifies that the forests are eligible through a three-step process: Plat maps to document ownership of a given tract of land, including the legal land description of the tract (Township, Range, etc.) A forest management or stewardship plan (documents for the Tree Farm System or Conservation Reserve Program are sufficient), and Documentation of the number of trees planted (such as a receipt from a nursery or cooperating forester).

Dogwood Carbon is currently enrolling landowners with contracts through December 31, 2010. For forest landowners with trees or reforested tracts planted before 2003, Dogwood Carbon can sell 2003, 2004, 2005 and 2006 credits as well. This would command an enhanced five-year payment for the first year of participation.

Because the CCX system is voluntary, participants are eligible for both government program payments and carbon credit payments. The Dogwood Carbon contracts stack perfectly upon existing payments through the Conservation Reserve Program, Environmental Quality Incentive Program or Missouri Tree Farm Program.

Dogwood Carbon's staff is ready to assist landowners in gaining access to these payments says Davis. "We're off and running, and we're seeing a lot of excitement in the opportunities for an additional income source for Missouri's forest landowners."

To learn more or to enroll in Dogwood Carbon Solutions' carbon credit system, please call Jake Davis at 573-808-2559 or e-mail Jake at dogwoodcarbon@gmail.com. Visit Dogwood Carbon online at dogwoodcarbon.com. To learn more about the Chicago Climate Exchange, visit chicagoclimatex.com. GH

"Missouri's forestlands are one of the most valu-able carbon storage buys on the market," says Jake Davis, Dogwood Carbon. "On a per acre basis, Missouri forests owners are in a solid position to earn a significant amount of income from the carbon credit trading system."

Participant Profile: Joe Heckemeyer Joe Heckemeyer is a diversified family farmer from Scott County in the Missouri Bootheel. In 1990, he planted 430 acres of loblolly pine and 170 acres of mixed hardwoods on former cropland through the USDA's Conservation Reserve Program. He recently signed a contract for carbon credit certification with Dogwood Carbon. Because of their age, Joe's pines are worth $30 per acre at current carbon prices and hardwoods are worth $15 per acre. This year, he will receive an enhanced payment for 2003, 2004, 2005, 2006 and 2007 for all of his enrolled acres. He will also receive annual payments in 2008, 2009 and 2010. In addition to the income from selling his pine straw, in 2007 Joe Heckemeyer will receive an enhanced payment of $69,525 (that includes back payments for 2003, 2004, 2005, and 2006 less 10% brokerage fee). He will then receive an annual payment of approximately $15,450 through 2010, depending upon the current carbon market prices.