While making their pitch over the last few years, representatives of GreenTrees have found Mid-South landowners extremely interested in conservation, planting forests and gaining income from the resulting carbon sequestration. But, unwilling to tie themselves to a 70-year lease, many refrained from signing on.

Now, lease length is no longer a hindrance.

“Three years ago, we knew the 70-year term would create heartburn for many landowners,” says Chandler Van Voorhis, GreenTrees managing partner. “But we had no choice. The way the carbon market was at the time, we had to demonstrate permanence based on what was acceptable. To get a good return for us and the lead investor (at the time, Duke Energy), we had to basically guarantee, or mitigate, the risk that the trees would be deforested. That’s why there was a need for a long-term lease.”

Many landowners interested in GreenTrees are considering converting agriculture land or marginal ground.

“When working with crops, their mindset is ‘one year at a time.’ And we were asking them to commit to non-deforestation for 70 years,” says Gravely. “That forced them to make decisions with multi-generational impacts for their family.

“We knew that was a barrier. The landowners that did enroll felt very comfortable that the land would remain in trees — and they want it to remain in trees — whether for recreational value, increased property value, estate planning, their own beliefs in conservation, etc.”

For every landowner who has enrolled in GreenTrees, Gravely suspects seven to 10 turned enrollment down “primarily due to the long-term lease.”

Recently, ACR (American Carbon Registry — a non-profit offshoot of Arkansas-based Winrock International), one of three well-known carbon registries in the country, launched version 2.0 of its forestry standard. ACR is the oldest private registry in the United States with in excess of 30 million tons of carbon.

“Basically, ACR’s updated standard allowed us, instead of the landowner, to absorb the risk long-term. ACR defines permanence as a 40-year period instead of 70 years. Given our planting regime and forest management plan, GreenTrees carbon occurs in the first 15 years. After that time, no new carbon occurs unless the landowner chooses to forgo his timber rights. Thus, we could offer the landowner a 15-year production lease. In turn, we’re on the hook to ACR — not the landowner — for carbon permanence for 40 years. We just want the landowner to do what he does best: produce.”

Why is GreenTrees willing to shoulder that risk?

“When you look at the statistical data for landowners, a very small percentage that establish trees put that land back into some other use,” says Gravely. “Most of the conversion risk is in grass CRP — it’s easy to convert grass back to an ag commodity.”

After seeing the response of landowners and “how fast and vibrant” the trees are growing on GreenTrees projects, “we believe the risk (of landowners reverting to row crops) is even lower. That’s not only because of the size and density of the 15-year-old forest but also because of the additional economic values that have been created.”

That combination spurred GreenTrees to create a “production lease” for 15 years that would be the same time as the landowners’ 15-year CRP contract. As with the original GreenTrees leases, the new version requires that landowners “agree to a specific silvicultural planting of 302/302 (cottonwoods/hardwoods per acre). And, in the lease, we give them A-Z on how it supposed to be planted.

“They’ll follow a kind of ‘GreenTrees for Dummies’ silvicultural script that provides them with a very high establishment but also gets the cottonwoods and hardwoods growing very rapidly right out of the gate. Plus, we give them on-the-ground personnel assistance at no cost to help with the USDA, hire the qualified tree planter and oversee the planting.”