Finite Carbon helps landowners, forestry consultants enter carbon offsets market

Posted July 13, 2009, at 3:52 p.m. CST

Finite Carbon could be the solution for landowners and forest consultants who are unsure how to enter the carbon offset market. The company was established in February and offers a single source, end-to-end solution with in-house expertise that costs the landowners no out-of-pocket expenses and will earn them extra revenue.

The company pays the capital costs for each project, collecting only a percentage of the carbon offsets once completed. That percentage is based on several factors, but it comes down to what makes sense and fits the needs of the landowner, according to President and co-founder Scott Nissenbaum.

Finite Carbon performs all the steps in the process including completing a forest carbon inventory; selecting the appropriate registry/protocol; translating inventory into a carbon model and management plan; preparing and submitting a project plan to the chosen carbon registry; hiring a third-party verifier once the plan is accepted and registered; submitting a project verification to register and receive allocation of carbon offsets; and marketing and selling carbon offsets in the Finite Carbon proprietary network or engaging top brokers to broaden the sales process, according to the company. Buyers can be major corporations and utilities, hedge funds and investment banks, Nissenbaum said.

The company was founded and is led by forestry and finance experts with unique forest carbon project experience and knowledge of forest markets. Nissenbaum, a venture capitalist, was chairman of the board of directors for ImageTree Corp., a forestry industry technology solutions company based in West Virginia, for three years and also has finance experience. Carbon Finance Vice President Sean Carney worked with Carbonfund.org developing and managing carbon neutral programs for well-known companies such as Volkswagen and Dell. Also on the team are Matt Delaney, senior forester with 10 years of forest carbon measuring and monitoring experience; Sterling Griffin, vice president of project development and a registered professional forester in California with 10 years of experience in private and public forest management; and Robert Verratti, CEO and co-founder, also a venture capitalist who has served as the CEO of several other companies.

Finite Carbon expects to be working with landowners who have 5,000 acres or more, according to the company. Anything less than 1,000 acres is not a cost-effective project for the company.

The process, from inventory to selling of carbon offsets, can take up to six months. That can vary, however, due to several factors including weather, which could keep them from going into the forests and gathering measurements, Nissenbaum explained. He expects the vast majority of the projects in which Finite Carbon invests will be approved and registered. "We're intimately familiar with protocols and what will or will not qualify," he said. To his knowledge, he added, Finite Carbon is the only company that offers such a service, with the extent of knowledge and experience the team possesses.

The typical contracts with landowners will run from one to 10 years, he said. After that time, landowners and their staff should be educated enough in the process to be able to monitor their own forestland. Finite Carbon will continue to develop contracts with landowners who still want its services, Nissenbaum added. "But for the most part somewhere in the one to 10 years, the landowner takes over and keeps 100 percent of the carbon offsets for themselves." The projects are in large part a partnership with the landowners and their forestry consultants, he said. "We're strong believers in aligning incentives."

The capital costs for each project will vary greatly and depend on factors such as size and location, but typically will be six figures, Nissenbaum said, with some running upwards of $1 million.

"So far, the landowner response has been great," he said. "It's adding revenue with no added cost. We feel like it's a very compelling value proposition for the landowner." If climate change isn't enough of an incentive for them to participate, it comes down to economics, he added.

"From Finite's perspective, our ultimate goal is to create and manage the largest stream of forest carbon offsets in the U.S.," Nissenbaum said.