Land ownership and carbon tradingWe are now beginning to think seriously about living in an environment of global warming, and how best to mitigate the effects of our industrial society. Efforts are currently being made at a national level, to deliver on promises of meeting our commitments to limit UK greenhouse gas emissions. Currently there is no facility for investing in the future value of carbon in the UK. However, it is expected that there will eventually be an ethical or financial incentive, in which companies may want to offset their emissions by buying into projects which sequester carbon. Companies may want either to appear more green, or they may be trading on the future value of fixed carbon as an asset. Of course it need not be just companies. It is also likely to be landowners and individual investors looking to buy land. Creating new woodland It appears that registration for new planting schemes in the future, will provide an investor with a good bet, possibly a very good bet, that their investment will grow as the carbon market develops. The correct and required national protocol will consist of existing sustainable forestry standards being the basis for new planting. And while grant funding will be available, an investor would be expected to put in at least 15% of planting cost. In exchange, and following the correct procedure, investors will be given a certificate of approval by the Forestry Commission (The Carbon CO2de). Once achieved, this certificate can be traded as the price rises, starting from the chancellor’s stated base rate of £16 per tonne from 2013, leading to an expected target of £30 by 2020 (budget, March 2011). The value of sequestered carbon in new woodland creation projects is therefore expected to rise and be traded as the market develops. Futures and speculation: the benefits of woodland management Ironically, global warming seems likely to provide an opportunity for speculation on the future price of carbon. However, woodland creation also brings a whole host of benefits to society. These include carbon sequestration in the forms of carbon storage above and below ground, timber production and supply, substitution of energy intensive materials, increased energy security and self sufficiency, and expanding habitat for biodiversity. If it seems sad that human development and the exploitation of the planet’s resources delivers only increasing pressures and global warming, then maybe the creation of new woodland for all the benefits that it brings, talks to us in a way that we can understand financially, sustainably, and emotionally. And maybe the approved standard of carbon trading will provide an orderly way forward to achieve these benefits. www.woodland-management.co.uk Clive Ellis will help deliver woodland creation schemes to the UK government's new Carbon Code. Carbon investment bought under such schemes will be eligible to trade as an investment opportunity following completion of planting projects. However, it is recognised that management for timber or other benefits may conflict with maximising carbon sequestration. Woodland and carbon holdings occupying the same piece of ground can be managed as separate entities, and can be sold independently of each other. Management planning and silvicultural prescription can therefore be agreed to provide the best outcomes for the landowner and investor, should they be different parties. Clearly, whilst the world needs feeding, it is not sensible to plant trees on productive agricultural land. Class 3 and below will be eligible. Once the certification bodies have been established and the scheme is rolled out, the new standards involved in carbon trading will be a further stimulus to sustainable woodland management.
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