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CVal: a spreadsheet tool to evaluate the direct benefits and costs of carbon sequestration contracts for managed forestsAuthor(s): E.M. Bilek; Peter Becker; Tim McAbee
Source: General Technical Report FPL-GTR-180. Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products Laboratory.
Publication Series: General Technical Report (GTR)
Station: Forest Products Laboratory
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DescriptionThis documentation is meant to accompany CVal, a downloadable spreadsheet tool. CVal was constructed for foresters, other land management advisors, landowners, and carbon credit aggregators to evaluate the direct benefits and costs of entering into contracts for carbon sequestered in managed forests and forest plantations. CVal was designed to evaluate Exchange Forestry Offset (XFO) contracts on the Chicago Climate Exchange (CCX), although the meth-odology could be adapted for other trading mechanisms and agricultural sequestration projects. Both the documentation and the spreadsheet tool are downloadable from http://www.fpl.fs.fed.us/documnts/fplgtr/fpl_gtr180/fpl_gtr180.html. Versions of CVal are available both with and without macros. Although all calculations can be done in the version without macros, the macros version has buttons and automations that make the calculations convenient. Our general finding is that it is critical in managed forest projects to determine whether carbon accumulated prior to entering the contract can be counted. Depending on the contract year and length, this can triple the revenue from CCX contracts. If it is not possible to count pre-contract year carbon, then it may not be economically worthwhile to enter the program unless it is extended. Other critical variables having a large effect on the overall profitability include the trade price of sequestered carbon, the carbon sequestration rate, and the hurdle rate (the minimum required rate of return on investment) used. Up-front and annual costs are important, but overall profitability is not quite as sensitive to these costs as it is to the previously mentioned variables. Users are expected to enter their own data to evaluate the feasibility of specific projects.
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CitationBilek, E.M. (Ted); Becker, Peter; McAbee, Tim. 2009. CVal: a spreadsheet tool to evaluate the direct benefits and costs of carbon sequestration contracts for managed forests. General Technical Report FPL-GTR-180. Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products Laboratory. 27 p.
KeywordsCarbon sequestration, carbon valuation, carbon contracts, carbon credits, Exchange Forestry Offset (XFO) contracts, Chicago Climate Exchange (CCX), decision support, discounted cash flow analysis, forest management, computer programs, costs, United States
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