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Can I get paid for the carbon in my woods?

December 3, 2020
Group of people walking on a path through the woods.

Many woodland owners have heard about forest carbon markets. In these markets, corporations and individuals pay for carbon dioxide emissions to offset their own emissions. Forest landowners are paid for the carbon storage and sequestration that their trees provide.

Minnesota’s forests are abundant with carbon. Across the state’s 17 million acres of forests, 1,337 million tons of carbon are stored in its trees, dead wood, soils and litter across the forest floor. This equates to approximately 75 tons of carbon per acre, or about the weight of 20 full-size pickup trucks.     

With all of the talk about carbon, many Minnesota woodland owners are wondering how they can be a part of these markets. There are over 180,000 private woodland owners in Minnesota, owning from just a few acres surrounding a home to thousands of acres in a remote area. Private woodland owners manage nearly 40% of the state’s forestland, making them an important component of the forest carbon marketplace. 

Types of forest carbon markets

Forest carbon markets can be categorized as either voluntary or compliance-driven (regulatory). Voluntary markets are typically managed by private entities while compliance markets involve government agencies.

Carbon offset projects are structured so that woodland owners can receive payment through a variety of approaches. These include:

  • Establishing a forest or stand of trees in an area where there was no previous tree cover (afforestation).
  • Reestablishing a forest on understocked or recently harvested land (reforestation).
  • Protecting a forest from being converted to non-forested land.
  • Improving forest management activities to increase carbon storage in the forest or associated forest products.

Regulatory carbon markets

The most well-known regulatory forest carbon market in North America is California’s Cap-and-Trade Program. Like all cap-and-trade programs, an emitter purchases an amount of annual emissions allowances (a cap).

  • If the emitter releases below the cap it can sell the remaining allowances.
  • If the emitter releases above the cap, they must purchase allowances (or trade) from other emitters.

While based in California, the program considers all properties in the United States for potential enrollment in the program. Landowners commit to a 100-year time period to store and sequester carbon on their property.

Despite its popularity, the California program works best for landowners with large properties. This is because of the large costs associated with inventorying, monitoring and verifying the amount of carbon stored on the property. For perspective, the average property size enrolled in the program is over 48,000 acres. The high up-front costs and large acreages generally do not make the California program suitable for the majority of Minnesota woodland owners. 

Voluntary carbon markets

Voluntary markets are typically operated by private entities and many of them offer more flexibility. For example, many voluntary markets are designed for smaller property sizes and allow shorter time commitments for carbon storage. These types of forest carbon market programs may be the greatest opportunity for private woodland owners with smaller properties (less than 100 acres).

One example of a voluntary forest carbon market is the American Forest Foundation’s Family Forest Carbon Program. The goal of the program is to make carbon offset programs accessible to smaller landowners. A pilot program is currently underway in Pennsylvania. 

The Family Forest Carbon Program enrolls landowners using two different approaches:

  • Growing Mature Forests promotes the growth of mature, high-quality trees. Landowners commit to limiting harvesting over a 20-year time period to sequester carbon.
  • Enhancing Future Forests promotes establishing new forests over a 10-year time period. This approach incentivizes landowners to ensure successful regeneration of trees through reducing competing vegetation or controlling invasive species.   

In the Family Forest Carbon Program, landowners are provided payment based on a predicted amount of carbon that a property will sequester given the management approach chosen. Although the Family Forest Carbon Program is currently only available to Pennsylvania landowners, it continues to grow. 

A number of other voluntary carbon markets continue to evolve. Some new programs are seeking to offer shorter time commitments, even as short as one year. A number of these newer carbon markets will likely be appealing to landowners with smaller property sizes. 

How Minnesota woodland owners can get involved in carbon markets

Payments for carbon sequestration can diversify revenue streams for private woodland owners. However, as of now, carbon markets are difficult for most private woodland owners in Minnesota to access. Carbon markets will likely expand and become more accessible to private woodland owners in the coming years.

If you’re a private woodland owner in Minnesota interested in carbon opportunities, continue to learn about them and reach out to programs to express your interest. The following resources provide additional information to learn more about forest carbon and carbon markets:

Managing for carbon starts with woodland planning

Aside from carbon markets, private woodland owners in Minnesota can already receive incentive-based payments for stewarding their forests. Examples of payments for Minnesota woodland owners include enrollment in the Sustainable Forest Incentive Act, 2c Managed Forest Law, or establishing a conservation easement that limits the development of your property.  The Minnesota Department of Natural Resources’ Forest Stewardship Program offers a number of cost share and incentive programs for private woodland owners. 

Most programs that offer incentive payments require a landowner to have a woodland management plan for their property. Managing for carbon storage or sequestration could be an objective that’s outlined in your woodland management plan. The online book Woodland Stewardship: A Practical Guide for Midwestern Landowners, 3rd Edition provides information for woodland owners interested in identifying goals for their property and working with a professional forester to identify the management practices that work for them. 

Matthew Russell, Extension forestry specialist

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