Michigan Conservation & Climate Initiative

The Chicago Climate Exchange is a voluntary, but legally binding carbon trading exchange, where members are obligated to reduce their greenhouse gas emissions every year through a combination of emissions reduction programs at their facilities and the purchase of carbon offset credits. Projects eligible as offset include agricultural practices such as conservation tillage, methane digesters, and forestry projects.

The Delta P2E2 Center in Michigan is an aggregate member of the Chicago Climate Exchange. They work with forest land owners in Michigan, through the Michigan Conservation & Climate Initiative to establish baseline and growth and yield models to calculate annual carbon sequestration and carbon stocks. These credits are them sold on the Chicago Climate Exchange, generating revenue for the forest land owner.

The credits are sold annually beginning one year after the baseline is established, thus there is no requirement for permanent protection of the forest land.

The credits are sold at the market rate, and the funds are distributed back to the landowner minus a $0.15 per ton trading free charged by the Chicago Climate Exchange and a 10% aggregation fee charged by the Delta P2E2 Center.

Eligible forest projects include small non-industrial working forests and reforestation projects. Small non-industrial working forests are those that are actively managed for tree harvesting, habitat, conservation, or another use. These forests must also participate in one of several stewardship certification program and have a Forest Stewardship Plan in place. Afforestation and Reforestation projects must have been initiated after 1989 and the land must be under long-term protection. In both cases, the landowners must issue a letter indicating their commitment to maintain carbon stocks on their forestlands through the implementation of an approved forest management plan.

Limited technical assistance is provided by the Michigan Department of Natural Resources. This revolving Technical Assistance Pool assist working forests cover the initial costs of preparing the forest inventory.

Insurance: The Chicago Climate Exchange reserves 20% of the allocated credits to compensate for unexpected carbon losses on the forestlands. At the end of the contract period, this reserve is sold on the behalf of the landowner.