This blog post is an abbreviated version of an article that was recently published in The Consultant, the annual journal published by the Association of Consulting Foresters (ACF). The figures presented in the article represent cycle participation totals as of November 2021 when the article was written. NCX is very grateful for the opportunity to work with many ACF member foresters across the US to engage their clients in the NCX forest carbon program. . Read the full article in the 2022 edition of The Consultant.
2021 was a big year for the NCX team and our partners: we have contracted with over 650 landowners across two commercial-scale forest carbon fulfillment auctions, we have rebranded from SilviaTerra to NCX to focus on developing ecosystem markets, and we have added over 25 new employees to our team.
While we have been moving fast since January, we remain focused on building relationships for the long term with critical stakeholders. Nowhere is this more true than the investments we are making to partner with consulting foresters.
As we look forward to the opportunities ahead, consulting foresters will absolutely remain a crucial partner to the future development and delivery of our mission to be the trusted, number one provider of forest carbon credits, using our AI-powered Basemap to connect American landowners with net-zero leaders.
A Forest Carbon Program for All Landowners
Until recently, family forest landowners have struggled to access forest carbon markets. Despite accounting for 39% of US forestland ownership, many of these landowners have not been able to participate in forest carbon programs due to minimum acreage requirements and the significant costs associated with getting a project developed. That’s why a major goal for NCX was to develop a program that works for smaller landowners. While the NCX program works well for all family forest landowners, we have also learned that our program design (specifically our remote assessments, straightforward seller agreement, and 1-year contract length) is also appealing to larger industrial managers who are looking to diversify their businesses with non-timber revenue opportunities.
In addition to working with many hundreds of smaller private landowners in 2021, NCX has partnered with TIMOs, vertically-integrated wood products companies, and larger private family ownerships. In summary, we believe our innovative approach can work for all landowners who are managing working forests. Two especially noteworthy aspects of our program are: 1-year term lengths and our approach to property-specific baselines – both are explained in more detail below.
1-year terms, Ton-year accounting, and Permanence
When we talk to landowners and consulting foresters, they consistently highlight NCX’s 1-year terms as the major differentiator versus other programs they have evaluated in the past that might feature 40, 50, or 100+ year long commitments. Family forest landowners are hesitant to make multi-generational commitments, and larger industrial managers can find it difficult to operationalize longer-term easements. Furthermore, with the demand for forest carbon projected to increase substantially in the next 20 years, many landowners are hesitant to lock in prices today by signing multi-year contract terms, and miss out on the future increases.
While the advantages to a 1-year term are clear from the seller’s perspective, consultants and landowners naturally want to know how the demand side of the market perceives a 1-year term, and how crucial issues like permanence are accounted for with the 1-year contract offered by NCX.
The NCX methodology incorporates a protocol referred to as “ton-year accounting,” an IPCC carbon accounting method introduced with the Kyoto protocol. Ton-year accounting demonstrates that projects holding significant amounts of carbon for one year deliver the same climate impact as a smaller amount of carbon held for 100 years, often used as the standard for a “permanent ton offset.” Learn more about our methodology.
Consulting Foresters Play a Vital Role in NCX
With a program up and running that works for all types of landowners, we have grown our reach quickly. So far this year, over 5,000 landowners have signed up on our online platform to begin the property assessment process and over 200 consultants have registered for our consulting forester program. In early January, our team began working closely with consultants across the Southeast to build awareness about our upcoming inaugural commercial-scale cycle, engaging through regular Zoom webinars and phone calls to answer common questions and collect feedback directly from the field.
In the Summer cycle we expanded to include the Lake States; all forest types across the Southeast, Michigan, Wisconsin, Minnesota, New York, and Pennsylvania were now eligible for our program. Once again, consultants played a crucial role in providing feedback on our program and engaging their clients. In fact, 25% of the over 570 accepted landowners in the Summer cycle were represented by a consultant.
From the very beginning, we have heard consistently from consulting foresters that they need to be the expert service provider for their clients with new market opportunities – and the NCX team couldn’t agree more. We go out of our way to give consultants opportunities to learn about our program, ask questions, and evaluate if it would be a good fit for their clients so that when the conversation comes up with a landowner they are well-prepared to guide the discussion.
We always recommend landowners consult with their forester when making a decision about participating in our program. To better support our consulting forester partners, we recently finished developing a “consultant dashboard” that allows foresters to easily manage all of their clients in an administrator account. We have also created case studies for typical forest types and ownerships in regions across CONUS, so that consultants can better understand the details of the NCX assessment process before sharing the program with their clients. You can access these case studies at ncx.com/forester.
We often describe our forest carbon program as “another tool in your toolbox as a forester.” This is because foresters are already doing the important work on behalf of their clients to balance priorities to achieve management goals. And while we’re humbled by the early positive reception, there is work ahead to continue making this an attractive opportunity for foresters and their clients.
For example, how can we use technology to make the client support as efficient as possible for consultants? In the future, NCX expects to partner with an increasing number of landowners who don’t currently work with a consulting forester. How might we connect these landowners with consultants as new client opportunities? These are all things that the NCX team thinks about on a regular basis, and we are always looking to hear the perspective of consulting foresters.
Increasing Opportunities for Consultants Working with NCX, Beyond Forest Carbon
Today, our team is focused on expanding our forest carbon program. However, we intentionally chose Natural Capital Exchange as our new name because it encapsulates the broader mandate that our team is working to uphold. We know that forests provide immense value to society in the form of climate benefits, biodiversity and wildlife habitat, aesthetics and recreation, forest products, and much more – foresters recognize and understand this better than anyone.
We want to use our extensive expertise in remote sensing, forest biometrics, and data science to address this global market opportunity by putting carbon and other ecosystem services on the same economic footing as timber. Simply put, we won’t be stopping with harvest deferral contracts. We expect to launch a pilot program in mid-2022 to incentivize forest management practices that improve wildlife habitat for certain species, and we are actively pursuing the development of afforestation and reforestation carbon programs to bring into our marketplace.
Soon, NCX will be providing a menu of contract options to consultants and landowners, leveraging cutting edge technology and innovative program design to massively open up access to new market opportunities. We eagerly look forward to continued collaboration with foresters and are committed to ensuring we grow together into this exciting future of forest management.
Begin your journey with NCX today by heading to ncx.com/forester.
Read the full article in the 2022 edition of The Consultant.