Forest Carbon and Wisconsin Carbon Markets

What is forest carbon?

Plants absorb carbon dioxide from the atmosphere as a key ingredient in photosynthesis, the chemical process that creates sugars. Plants release carbon back into the atmosphere when they break down sugars for energy through respiration, and dead organic matter emits carbon when it decomposes.

Carbon ends up in several different places (or pools) in forests. In the Chequamegon-Nicolet National Forest (from the drop-down menus select Eastern Region, Chequamegon-Nicolet), for example, approximately 51% of the organic carbon is in the soil, 34% is aboveground in live trees, 6% is belowground in live tree roots, 5% is in leaf litter, 3% is in deadwood, and less than 1% is in understory plants. These percentages vary from forest to forest based on the age, health, and composition of the woods. Durable wood products are also an important carbon pool, as they “lock up” carbon that would have otherwise been released through decomposition.

Typically, forests take in more carbon than they emit (a carbon sink). Nationwide, forests absorb 10-15% of the U.S.’s annual greenhouse gas emissions. After a significant disturbance like a wildfire, a forest may emit more carbon than it absorbs (a carbon source), but it will typically return to being a net carbon sink within 10-15 years.

The total amount of carbon in a forest is known as carbon storage, and the rate at which a forest adds carbon to storage is known as carbon sequestration. Sequestration and storage change as a forest ages. Forests that are 30-70 years old (or whose trees are 5”-16” in diameter) usually have the highest rates of sequestration because of their vigorous growth. On the other hand, old-growth forests do not sequester carbon very quickly, but they have higher total carbon storage because they have been accumulating it for so long. A forest with trees of various ages has more of a balance between sequestration and storage.

What is a carbon market?

A carbon market is a system that enables people to generate, sell, and buy carbon credits. One carbon credit corresponds to one metric ton of carbon dioxide (or the amount of another greenhouse gas that results in the same global warming potential) removed from the atmosphere or prevented from being emitted into the atmosphere. Projects to generate carbon credits exist in many industries, including forestry, agriculture, manufacturing, renewable energy, and transportation.

The markets that are most easily available to small woodland owners in Wisconsin are a type known as voluntary carbon markets (VCMs). In these markets, non-governmental stakeholders set the standards for generating, verifying, and selling carbon credits. Project developers—either companies or non-profit organizations—work to generate carbon credits. Then companies, governments, and even individuals seeking to voluntarily decrease their emissions can purchase credits. 

Many companies participate in a VCM to help reach their net emissions goals. In addition to reducing their emissions directly by changing their business practices, they can offset some of their emissions by purchasing carbon credits. 

Four main types of forestry projects can generate carbon credits: 

• Improved Forest Management—sustainable forest activities that maintain or increase carbon storage. In the U.S., and particularly in Wisconsin, most forest carbon projects are Improved Forest Management.  
• Afforestation—creating new forests in areas that have not been forested in the past 50 years. 
• Reforestation—creating new forests on recently cleared forest land or helping grow the next generation of trees in understocked forests.
• Avoided Conversion—preventing the conversion of forests to non-forest land. 

How is forest carbon measured?

Three main techniques are used to measure forest carbon. Foresters often measure a tree’s diameter at breast height to calculate its dry weight, and about half of that dry weight is carbon. Another method is to use standardized estimates for different forest ecosystems, regions, and stand ages such as those provided by the US Forest Service’s Forestry Inventory and Analysis (FIA) program. Lastly, remote sensing from the air (or even from space) can measure tree heights, canopy structure, and general tree health, from which foresters can calculate forest carbon. 

For carbon markets to function, project developers must measure three key aspects of the carbon stored in a forest: 

• Baseline—the amount of carbon that the forest would have stored without enrollment in the carbon program. 
• Additionality—the carbon stored beyond the baseline due to the changes in forest management practices that result from enrollment in the carbon program. 
• Permanence—how long the carbon stored remains out of the atmosphere, ideally at least 100 years. 

Also, project developers much account for any leakage of carbon from other forests. If one landowner starts harvesting more intensely to meet market demand for lumber because their neighbor in a carbon program is harvesting less intensely, then the carbon credits are not actually causing a net reduction in emissions. 

How can woodland owners participate in carbon markets?

The contents of this webpage are provided for informational purposes only. Mention of a specific carbon program does not represent an endorsement or recommendation by Extension.

Because of the fixed costs associated with inventorying and monitoring a forest, many forest carbon project developers only work with large landowners. However, some programs enroll landowners who have as little as 30-40 acres of woodland. Two such programs currently active in Wisconsin are the Family Forest Carbon Program and Forest Carbon Works. The Family Forest Carbon Program accepts only hardwood forests, while Forest Carbon Works accepts all native forest types. 

Enrollment in one of these programs is at least a 20-year commitment to implement agreed-upon improved forest management practices, along with certain restrictions on timber harvesting. In return, the program will pay you annually for the duration of the contract. Exact payment rates vary, but a typical rate is $200 per acre total over the commitment period (an average of $10 per acre per year). The program will then sell the carbon credits generated by your woods to other companies. 

What should I consider before enrolling in a forest carbon program?

It’s important to be fully aware of the benefits and downsides of the carbon program you may be interested in. Carbon programs align well with some short- and long-term management goals, but may not with others. 

Before you enroll, you should consult with a Wisconsin professional forester, who can help you navigate the forest management implications of the program. Make sure that you understand everything in the program contract before signing. Here are a few key questions you can ask a program representative: 

• As the forest landowner, what are my responsibilities to manage the existing carbon?  
• How will carbon stocks be monitored on my land and how often are carbon inventories performed? 
• What is the payment schedule?  
• How will payments change if a severe weather event or forest pest results in forest loss?  
• If I want to perform a timber harvest, what are the guidelines and how do I get permission from the program?  
• Are other forest management activities, like prescribed fire or invasive species removal, not allowed?  
• What types of companies will buy the carbon credits associated with my forest? 
• What happens if I sell or transfer ownership of my land before the end of the contract? 
• What are the penalties for leaving the program before the end of the contract? 
• If I have an existing conservation easement, am I eligible? 
• If I am part of the Managed Forest Law (MFL) program, am I eligible? 

If you have questions about forest carbon or other topics related to the changing climate, or if you want to provide feedback on this webpage, contact:

Page last updated February 2025.