Carbon Credit Program

[rbrunel]

Last week there was a discussion on carbon credit trading, here is the link to a program run south of the border http://www.ndfu.org/CARBONCREDITPROGRAM.html

[kamichel]

Interesting. The 3.5 per ton shows that there has been a drop already in the price per ton. By signing a multi year contract like the ones availlable one is subject to the price decline or increase so in that if you think you will get 3.5 dollars per ton it may very well be 2 dollars or more. So at .4 ton per acre per year and 3.5 per ton works out to 1.4 dollars per acre per year less a 25 percent withholding fee to be paid out at the end of the contract, and also less verification costs. But not neccessarily could be less depending on what the average price the carbon got traded for. Again they trade on the CCX which is not a mandatory exchange, so the people buying the carbon are doing so on speculation that the farmland carbon sink will someday be allowed to trade on the mandatory exchange and be worth much more. My opinion. Farmers should wait. Risk involved is not really worth it. Someday that particular carbon contract could be a liability.

[rbrunel]

That is my thoughts exactly, there are too many unknowns and something that may pay in the short term could cost alot in the long run.