• 6. Understanding Carbon Payments

    Now we will focus on the payment process to the TIST Small Groups.  In order to be eligible for payment, Small Groups must first meet certain eligibility requirements and agree to commitments between the Small Group and Clean Air Action Corporation (CAAC).

     

  • The Green House Gas Contract

    A requirement for TIST Small Groups to receive carbon payments is for every member of the Small Group to understand and sign the Green House Gas (GHG) Contract. It is very important that each Small Group member reads the GHG contract carefully. It is a long-term agreement which lasts 60 years, and so the Small Group must ensure that they understand everything clearly. If the Small Group does not understand part of it, ask for clarification.  The contract allows TIST and Clean Air Action Corporation (CAAC) to sell carbon sequestered from the trees. The GHG contract includes agreements between the Small Group and Clean Air Action Corporation.

  • The Small Group's Agreements

    Before joining TIST, the Small Group agrees to meet certain requirements in order to be eligible to join the TIST Program. When the Small Group signs the Green House Gas Contract, the Small Group is agreeing to meet those requirements. Those agreements are:

    Plant 1,000 Trees per Year

    Each Small Group will plant at least 1,000 trees, or more, depending on the size of the Small Group and their available land.

     

    Maintain Trees

    Small Groups agree to keep their trees alive for 30 years, and to replant tree as they die.

    Trainings

    Small Groups agree to participate in TIST trainings and to help develop best practices.

    Measure Trees

    Small Groups agree to allow TIST stage to come and measure their tree growth and progress in TIST.

  • As you just read, the Small Group commits to keeping their trees alive for 30 years and to replant trees as they die. The Small Group agrees to do this for the 60 years of the GHG contract. If the Small Group does not do this, the Group will be ineligible to receive pre-payments or profit sharing. This is very important to note. For example, if a TIST tree is cut down for timber there are financial implications for the Small Group and for TIST: since the tree is no longer sequestering carbon, the carbon credit form the tree cannot be sold and so the Small Group and TIST both suffer.

  • Clean Air Action's Agreements

    The Green House Gas Contract also requires agreements from Clean Air Action Corporation to the Small Group. Below is a description of those agreements:

    Provide Training

    Clean Air Action agrees to provide information through trainings, newsletters, and online.

    Transparent

    Clean Air Action agrees to be accurate and transparent in measuring the Small Group's trees.

    Profit Share

    Clean Air Action agrees to pay each Small Group 70% of the profits from the sale of carbon credits once the trees reach sufficient size.

    Pre-Payments

    Clean Air Action agrees to a pre-payment of $.02 (USD) each year for each living tree over 6 months of age until the trees are eligible for profit sharing.

  • Understanding Prepayments

    As we just read, Clean Air Action commits to paying the Small Group a pre-payment of $.02 USD per year per living tree over 6 months old.  Below is a detailed description of this pre-payment.

  • Age Eligibility

    In order to be eligible for a pre-payment the tree must be 6 months old.

    Pre-payment amount

    The pre-payment is $.02 USD per year for each living tree over 6 months of age

    Minimum Payment

    This pre-payment is also the minimum payment that Clean Air Action guarantees per year for each living tree.

    Ending Pre-Payments

    When the tree reaches maturity after 5-10 years, it is eligible for profit sharing. When profit sharing starts, the tree is no longer eligible for pre-payments.

  • Understanding Profit Sharing

    Under the Green House Gas Contract the Clean Air Action Corporation agrees to give 70% of the profit from the sale of carbon credits back to the Small Group. This concept can sometimes be confusing, so the following section breaks down this profit sharing arrangement step-by-step.

  • Sequestering Carbon

    When a tree reaches sufficient size, Clean Air Action can sell the carbon sequestered by those trees as a carbon credit, receiving money.

    Carbon Revenue

    This carbon revenue includes two parts: the COST, including the costs of the TIST program, and the PROFIT, which is what is left when cost is subtracted from the Carbon Revenue.

    Sharing the Profit

    Clean Air Action agrees to share the profit with the TIST Small Group.

    70% Profit Share

    From this Profit, Clean Air Action agrees to give 70% of the profit to the TIST Small Group. The rest is invested back into the TIST Program.

  • Payment Eligibility

    Small Groups receive payment for either the pre-payment or the 70% profit share every six months. In order for a TIST Small Group to be eligible to participate in payments, the Small Group must have completed the following:

    Signed GHG Contract

    A Green House Gas Contract must be signed by all members of the Small Group.

     

    Trees Measured

    The Small Group's tree groves must have been measured, or quantified, in the last 12 months.

    Information Collected

    All of the Small Group's information must have been collected by TIST staff.

    Tree 1 Year of Age

    All the trees in the grove must be at least one year of age.

  • Farmers join TIST as a Small Group. These farmers plant trees as a Small Group and are quantified as a Small Group. TIST pays the Small Group, not the individual farmers in the group.

     

    The Small Group members retain ownership of the land and the trees, and anything that the trees grow. Clean Air Action owns the carbon sequestered by those trees.

  • Ready to learn more?

    Well done!  Many people find this section to be difficult to understand, and please go back and review this training if you still have questions. 

     

    Ready for next steps?  Click the link below to learn how to join TIST so that you can "Go and Do!"

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