How are carbon credit contracts structured?
Currently the Chicago Climate Exchange is the only market that certifies soil carbon as a greenhouse gas offset. The carbon offset provider(s) typically must agree to employ a specific land use practice for five years. Providers must set aside 20-40% of their revenue to mitigate against risk, such as that of a catastrophe such as drought that would prevent the expected offset of carbon dioxide emissions. Projects that are likely to offset less than 10,000 metric tons of carbon dioxide annually. You can look at an example of a soil carbon contract that could be adapted for use on rangelands. This contract for soil carbon offsets is used by a company called an “aggregator” that combines the offsets from multiple landholders and sells them on the exchange.
