As carbon programs continue to evolve and expand throughout the country, many programs focus on agriculture, specifically sequestering carbon in row crop production. Why agriculture? In April, I wrote an article that addressed this very question, outlining the driving forces behind carbon programs in the U.S., "What is the Driving Force behind Carbon Programs in the U.S. and Why Agriculture?" While carbon programs in the agriculture sector garner most of the attention, another opportunity is on the horizon for Kentucky woodland owners to participate in these programs.

Forest-based carbon programs are beginning to take shape and expand across the U.S., including Kentucky. This is not surprising, given most verified carbon credits on the global market today were generated from forest-based carbon projects. To date, family forest owners have had limited access to carbon programs because of the upfront costs and the complexity of carbon programs and contracts. Since 47% of Kentucky is covered in forests (over 12M acres), the roughly 423,000 private landowners representing 78% ownership of forested lands in Kentucky now have options to enroll their woodlands in a carbon program (Thomas et al, 2007).  Figure 1 illustrates forest land ownership across Kentucky.

The Nature Capital Exchange (NCX) and the Family Forest Carbon Program (FFCP) are two carbon programs of particular interest to woodland owners.  These programs are vastly different and should be researched thoroughly before signing a contract. A brief description of each carbon program is provided below.

The Natural Capital Exchange forest-based carbon program is currently operating in Kentucky and is actively recruiting acres for enrollment. According to their website, they offer a one-year harvest deferment contract that issues a payment after confirmation and verification, with zero fees for participation. NCX currently has enrolled 4.6 million acres in its carbon program. More information can be found on their website.

The Family Forest Carbon Program is a joint venture between the American Forest Foundation and The Nature Conservancy. While not currently operating in Kentucky, they are expected to expand into Kentucky soon. According to their website, they pay landowners for implementing forest management practices rather than a harvest deferment like NCX. FFCP has enrolled 26,792 acres with a minimum requirement of 30 acres. More information can be found on their website.

As with any carbon program you might be interested in, it is important to always ask questions, read the fine print, and seek legal advice before signing any contract. The University of Kentucky Forestry and Natural Resources Extension is currently developing a Forest Carbon website and Extension Programming materials for landowners and forest managers. 

Figure 1: Breakdown of Forest Ownership in Kentucky

Source: Thomas et al. (2007) “Kentucky Forest Fact Sheet.” FOR-53. University of Kentucky Cooperative Extension Service. 

Recommended Citation Format:

Shockley, J. and J. Muller "Carbon Programs for Woodland Owners in Kentucky." Economic and Policy Update (22):9, Department of Agricultural Economics, University of Kentucky, September 29th, 2022.

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Author(s) Contact Information: 

Jordan Shockley | jordan.shockley@uky.edu

Jacob Muller | UK Forestry and Natural Resources | jacob.muller@uky.edu