Conservation Easements vs. Carbon Credits
- Craig Kaiser
- Jun 10
- 5 min read
Under a conservation easement, the landowner voluntarily agrees to limit or prohibit certain activities on their property to preserve its conservation values. These values can include protecting wildlife habitat, preserving open spaces, maintaining water quality, safeguarding agricultural land, or maintaining historical or cultural resources. Whether a landowner can benefit from a conservation easement and earn carbon credits from the same property is a potential point of uncertainty currently. The additionality requirement that many carbon programs require means that carbon credits can only be issued for projects that do more than what is legally required. Since conservation easements generally have legal requirements to not develop the land or harvest timber, landowners could not claim going beyond what is legally required. Many argue against this, saying that it punishes landowners who were trying to conserve their land before options like carbon credits were available, and disincentivizes conservation easements.
Key Takeaways:
Conservation Easements: Landowners voluntarily limit certain activities on their property to preserve conservation values like wildlife habitat, open spaces, and water quality.
Carbon Credits and Easements: There's uncertainty about earning carbon credits on land under conservation easements due to the additionality requirement, which mandates that projects exceed legal conservation requirements.
Land Requirements for Carbon Credits: Typically, carbon credit projects require over 40 acres of forestland or several hundred acres of farmland or grassland, though smaller projects may need less land.
Legal and Financial Aspects: Conservation easements are legally binding and can offer financial benefits, including tax incentives and potential compensation from government programs or nonprofits.
Revenue from Carbon Credits: Payments for carbon credits depend on the amount of carbon dioxide sequestered by the land, with companies purchasing credits to offset emissions.
Long-term Agreements: Both conservation easements and carbon credit leases involve long-term commitments to preserve land, with agreements tailored to specific conservation goals.
What are Carbon Offsets?
Carbon offsetting enables individuals and organizations to counterbalance their greenhouse gas emissions by investing in projects that reduce, avoid, or remove emissions elsewhere in the world. These initiatives often include renewable energy development, reforestation programs, and energy efficiency advancements. By supporting such efforts, entities can effectively neutralize their carbon footprint while contributing to a more sustainable and environmentally responsible future. As awareness of climate change intensifies and the demand for sustainable practices continues to grow, carbon offsetting has emerged as a vital tool in the global fight against environmental degradation.
Carbon offset project developers are always looking for lands that sequester significant amounts of carbon from the atmosphere. There are many different types of carbon credits, but the requirements of land for carbon credit opportunities are all the same:
Acreage Required to Sell Carbon Credits: Developers generally look for acreage above 40 acres of forestland, and over several hundred acres of farmland or grassland. However, smaller projects in the carbon markets could require smaller amounts of land acreage.
Carbon Credit Lease Length: Carbon leases can range from 5 to 100 years depending on the type of offset credits and length of the project.
For carbon credits, the payment for landowners depends on the amount of carbon dioxide the parcel of land captures. From there, companies looking to reduce their carbon emissions can purchase the carbon credits for a period of time, or lease the land. The payment will depend on the contract signed between the landowner and purchaser/lessor.
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What are Conservation Easements?
A conservation easement is a voluntary, legally binding agreement between a landowner and a qualified organization, such as a land trust or government agency, designed to safeguard the land's conservation values. These values may include natural ecosystems, scenic landscapes, agricultural use, historical significance, or open space preservation. While the landowner retains ownership, they agree to specific restrictions on development or other activities that could harm the protected resources.
Within a conservation easement agreement, the specific terms and conditions are negotiated between the landowner and the responsible organization or agency. They are typically tailored to the specific characteristics and conservation goals of the property. The agreement is legally binding and is recorded in the property's deed, ensuring that future owners must also comply with its terms. While the landowner retains ownership of the property, the conservation easement "runs with the land," meaning that the restrictions and protections in the agreement remain in place even if the property is sold or transferred to new owners. The organization or agency responsible for overseeing the easement is responsible for monitoring and enforcing compliance with the terms of the agreement over the long term.
Conservation organizations or land trust alliances sometimes have funds available to compensate landowners for the development rights they are relinquishing through the conservation easement. Additionally, landowners may receive tax deductions or other financial incentives for placing their land under a conservation easement. Government cost-share programs similar to conservation easements that still allow landowners to earn income from their land include the Conservation Stewardship Program (CSP) and the Conservation Reserve Program (CRP).
Conservation Easements vs. Carbon Credits
The requirements of landowners to uphold carbon credit leases match conservation easement agreements similarly. Both conservation easements and carbon credits support the goal of preserving land so that there is no development. However, with conservation easements, the primary goal is to protect biodiversity, ecosystems, and open spaces, rather than directly addressing carbon emissions. Similarly, unlike conservation easements, carbon credits are tied to specific projects and may not have permanent effects unless the projects are maintained over time.
Earning Income from Conservation Easements and Carbon Credits
Securing a conservation easement is a collaborative journey for landowners. It starts by teaming up with a qualified organization, such as a land trust, to evaluate the property's unique conservation value. Together, they identify what makes the land special- be it its wildlife habitat, scenic beauty, or agricultural importance- and craft an agreement that protects those features. Once the terms are finalized, the easement is legally recorded with the property's deed, ensuring its protection for generations to come.
Interested in learning how much your property could be worth to sell carbon credits? Find your land on LandApp's map to generate a free property report, complete with carbon lease estimates for tree carbon, reforestation, and more. If you're interested in leasing your land for carbon credits to earn income from carbon credits, list your property for lease completely free on LandApp's marketplace after getting your free report to connect with a nationwide network of carbon developers:
