1.    Landholders need to forecast their net income from selling their own carbon and compare this with other trees planting deals such as Carbon Neutral’s.  An emissions trading scheme ‘spot price’ is unpredictable and in any case it is not what landholders would make for their carbon.  To receive income from their own carbon, landholders would have to:

• raise the capital
• purchase and plant the tree seedlings
• pay to establish, verify and maintain an approved carbon pool
• pay to verify and register abatement as the tree grow
• wait until carbon abatement is created before selling the abatement.

These are all considerable costs that are likely to amount to more than half of the carbon price.

2.    The Carbon Neutral option does all of the above for you. In return for the carbon rights for 100 years, CN raises the funds and establishes the trees for you at no cost and in addition provides ‘up front’ payments.
 
3.    In the case of CN, 75% of the price ($18 – $19 per tonne CO2 that clients pay) covers the cost of:

• Providing the seedlings
• Preparing the site
• Planting the trees,
• Incentive payments  (1 and 4 are all payments to landholders)
• Infill and other plantings to cover failure or under-performance

The other 25% goes into raising the capital for plantings, establishing and maintaining the carbon pools through Greenhouse Friendly (see under ‘About Carbon Neutral’), reporting to GF to maintain approval for the carbon pool and providing information via a website and email. All of these expenditures would be incurred by land holders wishing to produce and sell their own a carbon abatement.
 
4.    Landholders should be aware that the carbon covenant, which must be registered over their property for carbon abatement to be created from their trees must remain on the property even when the property is sold, regardless of who owns the carbon rights. i.e. Planting with CN results in no more encumbrance on the property than if the Landholder were to create and sell their own carbon abatements.   
 
 
5.    Carbon Neutral only buys the rights to the carbon, not the tree products.  The landholders’ returns for transferring the carbon rights over the planting sites to CN are that they have their trees established for free plus they get an ‘up front’ incentive payment.  The landholder can still harvest and sell tree products.  Carbon Neutral plantings offer landholders a lucrative way of diversifying into trees now and making money in future from products and benefits.

CN pays the full cost of planting and establishment plus incentives:

• We provide the seedlings (including transport)
• We pay either the landholder (if they are qualified and experienced in tree planting) or a contractor to prepare the site and plant the trees
• We supervise the operations and (in liaison with the landholder) monitor health of the plantings
• We arrange for infill plantings if survival is below 80% at 2 years (we may pay for these if the landholder has taken due care to look after them)
• In addition CN pays the landholder incentive payments in two instalments – 2 years and 5 years after planting pending satisfactory tree survival. The payments are pre-determined according to quality/ expected productivity and area of the site.

In return for this payment, CN takes out carbon rights and covenants over the planted area for a period of 100 years. In effect CN then owns the carbon but the landholder owns the trees, any other products or benefits derived from them and of course still owns the land.
Interested property owners can contact CN for a brochure outlining the program.

Of the price charged, about 77% goes into establishing and maintaining the many tree plantings comprising the carbon pool:

• Providing seedlings
• Site preparation and planting costs
• Landholder incentive payments
• Site coordination, mapping, sequestration estimation
• Covenanting
• Operating buffer, this is for planting more trees to ‘insure’ against the failure or under-performance of any sites, thus ensuring that more than the estimated amount of carbon is sequestered.

The other 23% is for the essential tasks of:

• Marketing
• Administration
• Record keeping
• Carbon and financial accounting
• Reporting to Greenhouse Friendly to maintain GF approval for the carbon pool
• Emissions estimation
• Website updates and provision of information to client