Carbon Credits Explained
Carbon credits, also known as carbon offsets, are measurable emission reductions from certified climate action projects. They reduce, remove, or avoid greenhouse gas emissions. A carbon credit gives the right to emit one metric ton of carbon dioxide. This is done by assigning an area of land to sequester the carbon, for example. Carbon credits can either be exchanged in a carbon market voluntarily or as part of a regulatory framework. A company purchasing carbon credits is funding projects that remove carbon dioxide from the atmosphere. This offsets the company's emissions.
Essentially, the company is balancing out its emissions by funding projects that reduce carbon dioxide. Many companies are setting net-zero targets, meaning they are offsetting 100% of the carbon they are emitting.
LandGate is helping landowners and carbon investors buy and sell carbon offsets on our secure marketplace. Landowners can list their land on LandGate's marketplace for carbon leasing. This way, they can obtain a carbon lease and supply carbon credits to a company or project. A landowner who provides land for carbon credits agrees to certain practices.
These include not chopping down trees for timber, as these trees store carbon. Additionally, regenerative agriculture is used to maximize carbon storage. Companies and Investors can source carbon offset solutions and carbon credits from LandGate’s marketplace as well.
Landowners can get a free property report from LandGate detailing their land's carbon credit lease potential:
How to Sell Carbon Credits - Carbon Credits for Landowners
Can farmers sell carbon credits? Absolutely! Farmers and landowners can sell carbon credits because ALL land can store carbon. Landowners are eligible to receive carbon credits at the rate of one per every ton of CO2 their land sequesters. LandGate helps landowners understand how much carbon their land can sequester every year.
LandGate can also help landowners sell their carbon credits at the highest price through a simple process. A landowner who provides land for carbon credits agrees to certain practices. These practices include not cutting down trees that store carbon, and using regenerative agriculture to increase carbon storage. Landowners can sell carbon offsets on what are called voluntary carbon markets. These carbon credit buyers are purchasing carbon credits as an investment or are businesses trying to meet internal standards for carbon footprint reduction.
In contrast, a cap-and-trade market consists of companies trading allowances. Caps, or limits on pollution, are set by the government and generally apply to an entire industry.
The government regulates adherence to these caps and hands out penalties for failure to comply. Companies that cut pollution at a faster rate can trade their allowances with companies that emit more carbon and therefore need additional allowances to meet the mandated caps.
How Much is a Carbon Credit Worth?
Carbon credit value or price fluctuates in voluntary markets, as it depends on the supply and demand of the economy. Current rules permit the international transfer of carbon credits.
However, supply and demand variances across countries will cause price variations. In 2023, a carbon credit trades for around $40 – $60 per metric ton of carbon dioxide stored.
It is important to remember that as more companies commit to net-zero goals, demand for carbon offsets will likely rise. This could lead to an increase in the cost of carbon offsets.
Companies can also use carbon credits to offset the cost of their emissions. Companies can purchase carbon credits to balance their emissions in the atmosphere. These credits support projects that reduce emissions and absorb carbon dioxide. This allows them to meet their emissions reduction goals while maintaining a steady financial investment. Several recent studies predict that carbon credit prices will increase tenfold in the next decade, and likely more (1,2). Putting things into perspective: A landowner's farm or ranch land can absorb a wide range of amounts of carbon dioxide. The amount absorbed depends on location, soil type, and the tree canopy.
It can range from 0.5 to more than 5 tons/ac/yr. This means the possibility to make as much as $1,000,000 per year on one thousand acres of land by 2030!
Verified Carbon Credits
When it comes to compensation for carbon credits, buyers differ in their preference. Verified carbon credits are generally more attractive than unverified ones. Would you let a surgeon operate on you if they had never been to medical school? Probably not. You can think of carbon credit verification the same way.
Rather than buying carbon credits that just claim to offset emissions, verified carbon credits guarantee that the emissions will be offset. This means the carbon offsets will have the environmental impact they claim to have. Carbon credits are verified using careful data and analysis. LandGate does not verify carbon credits.
The quality of a carbon credit is determined by how carefully it has been verified. The higher the quality, the more a buyer will trust it and be likely to invest.
You may also hear the term 'certified carbon credit.' Carbon offsets that are certified are generated under the Clean Development Mechanism (CDM) and are called Certified Emissions Reductions (CERs). The CDM assists emissions reduction projects that generate CERs. CERs can be bought and traded by participants in mandatory compliance schemes around the world to meet their emissions targets.
The main difference between carbon credit certification and other processes is that it is regulated. It is designed to offset a project's emissions and meet government requirements on carbon emissions.
LandGate assists landowners in selling their carbon credits and buyers by ensuring they are buying quality carbon credits, and we make the process fast and easy. It is on the carbon credit developer/ investor rather than the buyer to have carbon credits verified when trading on LandGate’s carbon marketplace.
Whereas due diligence can often take months, we have calculated the carbon storage potential of every land parcel in the US based on tree canopy, soil type, climate, and more. To find out what your land is worth for carbon offsets, find your property on LandGate's map and generate your free property report.
How to Buy Carbon Credits
Carbon credits can be purchased from a variety of sources, including online carbon marketplaces, brokers, and retailers. LandGate is an online platform that specializes in providing carbon offset solutions for businesses and individuals by connecting them with landowners who manage sustainable land-use projects.
Here are the general steps to follow when buying carbon credits through LandGate:
Determine the amount of carbon credits you need to purchase. This will depend on the amount of carbon emissions your business or organization produces.
Visit the LandGate website and create an account.
Browse the available carbon credit projects on the LandGate platform. The land for lease for carbon credits may include reforestation, avoided deforestation, and methane capture projects.
Choose the project that best fits your sustainability goals and budget.
Contact the landowner associated with the project to purchase the credits. You will typically need to provide information about the amount of credits you need, the type of credits you want, and any other lease stipulations you would like to include.
LandGate provides the land and data necessary for the creation and verification of carbon credits. Once you have purchased the credits, you will receive a certificate or other documentation that verifies your ownership of the credits. You can use this documentation to show that you have offset a certain amount of carbon emissions. If you are an energy investor looking to access this carbon data, learn more about our Carbon Data Solutions.
https://www.sciencedaily.com/releases/2021/06/210604122439.htm
https://www.greenbiz.com/article/carbon-offset-prices-set-increase-tenfold-2030
