There is rarely enough money to grow and care for city trees, but carbon credits are becoming a viable way address funding gaps

November 12, 2022  | Alec Sabatini

Carbon credit markets have been booming and there is a premium to be paid for projects sequestering carbon dioxide (aka a tree’s day job). At the same time, municipalities and nonprofits are always on the hunt for additional funding for tree planting and maintenance. Clearly, there is an opportunity here!

Large scale, rural reforestation has been in the carbon credit game from the beginning, but over the last few years urban forest projects have also finally gotten a seat at the table. Read on for an introduction to all things urban forest carbon credits, including how the carbon market works and what it takes to earn credits from urban forestry projects.

Carbon Credits Explained

First, the ground rules of carbon credits.

Carbon credits are a mechanism for companies, governments, or individuals to balance out their carbon dioxide emissions by investing in projects that remove carbon from the atmosphere or avoid emitting it in the first place. The emitting parties purchase credits to offset their own emissions, usually to keep in line with an established goal, such as net-zero emissions.

Carbon Credit

A carbon credit is a tradable certificate representing one ton of carbon dioxide (CO2) removed or avoided. To earn credits for CO2 removal, organizations register their project with a carbon registry, plant trees, and receive third-party verified credits based on the trees health and growth at periodic intervals. To earn carbon credits for avoiding CO2 an organization must preserve an urban forest facing some threat of removal.

In carbon credit lingo this concept is called additionality. It means the emission reductions or removals must be in excess of what would happen under a “business as usual” scenario and the activity would not have occurred without the incentive provided by the carbon credit. Quality carbon credits require proof of additionality.

Carbon Markets

The trading system through which carbon credits are sold is called a carbon market, and there are two types.

• Mandatory carbon markets, such as California’s cap-and-trade program, have a regulatory limit (cap) on company emissions in certain sectors, such as energy or transportation. Companies buy and trade credits to stay in compliance.
• Voluntary carbon markets are for companies and organizations that choose to offset carbon emissions of their own accord. There is no regulatory body that governs these markets.

Carbon Registries

Carbon registries are responsible for issuing and tracking credits. They develop standards and protocols that projects follow in order to earn third-party verified credits. You can see an example of a tree planting protocol from the nonprofit carbon registry City Forest Credits here. Ultimately, the carbon registry’s role is to ensure integrity of each carbon project.

This diagram shows how a carbon registry fits into the process with the local operator (the entity responsible for the urban forest project) and the credit buyer. Graphic Credit: City Forest Credits

Crediting Urban Forests

There are four registries that generate almost all of the world’s voluntary market offsets. The first protocol for urban forest carbon credits was launched in 2008 by one of the big four, the Climate Action Reserve. Unfortunately, the development of those protocols was heavily influenced by rural forest protocols that didn’t align well with the smaller carbon volumes of urban projects, and it never gained much traction.

Urban forest projects are a different animal than a lot of other offset projects. The stakeholder groups leading the project are usually municipalities and nonprofits, instead of for-profit carbon developers. The volumes of carbon are much lower, but the co-benefits (the positive impacts of urban trees besides sequestration) are massive. Urban residents often have limited access to nature, which is an issue because there is a mountain of research connecting access to trees and greenspace with improved health and well-being.

“Urban forest carbon projects directly benefit millions of people and take place right where people live, breathe, and recreate.”

Liz Johnston, Director of City Forest Credits

This unrealized opportunity inspired the creation of City Forest Credits, a nonprofit carbon registry focused solely on urban forests.

City Forests Credits’ Process 

City Forest Credits (CFC) was launched in 2015. Their first step was to gather a volunteer group of top scientists and representatives from city climate programs, watershed management, arborists, utilities, and land trusts to draft practical urban forest carbon credit protocols. The group developed two protocols, one for urban tree planting and one for urban tree preservation.

The rules of the protocols ensure one credit equates to one ton of carbon sequestered. Below are some of the key points of each protocol.

Carbon Credits for Tree Planting

There are 13 tree planting projects currently generating carbon credits with CFC. Complete details on project requirements are available at the City Forest Credits website.

• CFC requires a 26-year commitment for tree planting projects
• Projects must be located in or adjacent to urban areas, city, towns, municipal watersheds, or transportation/utility right of way
• Carbon credits are issued ex ante, meaning the forecasted CO2 storage of the tree at year 26 is used to issue credits in advance
• The credit issuance periods are after planting, and at years 4, 6, 14, and 26

Carbon Credits for Tree Preservation

There are 7 third-party verified projects registered through CFC’s tree preservation protocol. Rural forest carbon projects typically require 1,000 to 5,000 acres to be feasible. Urban park spaces are inherently much smaller, and the largest CFC preservation project underway to date is 200 acres. Complete details on project requirements are available at the City Forest Credits website. 

• Tree preservation projects require either a 40-year or 100-year project duration
• Projects must be located in or adjacent to urban areas, city, towns, municipal watersheds, or transportation/utility right of way
• The threat of loss of the trees must be demonstrated by showing the trees have no prior protection from removal, have a land use designation that allows for at least one non-forest use, and are surrounded partially by development or would have a higher market value after development
• The project operator must prove preservation from removal via a recorded easement, covenant, or deed restriction

Tree Preservation Example: Buena Vista Heights Conservation Area

The Allegheny Land Trust protected 124 acres of woodlands from rapid encroaching residential development in Allegheny County, PA. The area is called the Buena Vista Heights Conservation Area, and in 2020 it was registered with CFC as a tree preservation project. Protection of the forest contributes to maintaining clean drinking water for Pittsburgh region residents, and the 40-year-old maple, cherry and oak-hickory forest provides habitat for deer, turkey, and many species of birds, as well as a destination for hikers, birders, and mountain bikers.

The project was issued 13,966 credits. Revenue generated from the sale of carbon credits will be put towards acquisition costs, land stewardship, and future expansion of this and other conservation lands. The assessed co-benefits from the preserved area come out to a total savings (avoided costs) of $288,364 per year, or over $11 million over 40 years!