Natural Capital Exchange

Allowing forests to grow is a shovel-ready method to achieve net-zero by 2050. Forests could absorb up to 8.9 billion metric tons of CO2 every year, but to reach this goal, it will take participation from all landowners and acres of forests. Most forest carbon projects exclude small landowners, accounting for 200 million acres of U.S. forests. A meaningful climate solution cannot happen without them, and NCX enables that. 

We democratize access to forest carbon markets, allowing landowners of any size to participate through our ton-year accounting approach that eliminates decades-long contract periods, high setup costs, and acreage minimums.

NCX started with 100 landowners, setting the record for the largest forest carbon project by acreage in the U.S. NCX will scale this approach around the world to empower global communities, provide alternative revenue sources to landowners, strengthen wildlife habitats, and drive greater climate impact through a verified solution. 

We are solving one of the biggest market failures in the world – the failure to put forest carbon on the same economic footing as timber as a tool to fight climate change. 

Every year, the world emits approximately 51 billion tons of greenhouse gases into the atmosphere. To avoid the worst impacts of climate change, we need to reduce that number to zero by 2050. Forests are immediately deployable tech to provide needed carbon removal. However, traditional forest carbon projects prevent small landowners, owning 200 million acres of forest in the U.S., from participating due to decades-long contracts, high setup costs, and acreage minimums.  

NCX democratizes access to forest carbon markets by paying landowners to change their forest management through one-year contract terms and zero participation fees, making it easy for small landowners to participate. NCX also enables corporations with net-zero emissions goals to make a local impact by purchasing the resulting carbon credits.

Landowners who would have traditionally used the revenue earned from their timber as their source of livelihood are now able to receive fair payment for the sequestered carbon on their land, keeping trees standing and receiving alternative revenue they would not otherwise have access to.

NCX’s forest carbon marketplace pays landowners to not harvest their timber and grow older, more carbon rich trees. To ensure this happens, every acre of an enrolled property is measured by NCX's regularly-updated Basemap, the first high resolution forest inventory of the continental United States. Basemap is a list of predicted tree counts by diameter and species for every 30m X 30m pixel in the continental U.S. We use Basemap, field measurements, and remote sensing datasets to assess enrolled properties at the beginning and end of an annual enrollment period. Landowners are paid for deferred harvests, ensuring payments only go towards real climate impact.

Basemap helps us ensure carbon buyers only pay for carbon that is actually sequestered. Confirmed impact coupled with one-year contracts and economic models taking into account local timber prices, timber mill routes, and leakage, ensure carbon sellers and buyers participate at a fair market-driven price.

Designed by foresters for landowners:

We designed the Natural Capital Exchange from the ground-up to work for a wide variety of individuals ranging from small rural family landowners to large investment landowners. One-year terms integrate into the land management cycles for landowners, do not encumber future generations with multi-generational contracts, and ensure that each year, dollars are targeting acres at risk of harvest. Now, small landowners who have previously been excluded from traditional forest carbon markets, can profitably participate in the market, all while fighting climate change. These one-year terms also give carbon buyers confidence that their purchased credits are driving real climate impact. 

Multiple landowners have expressed their appreciation of the NCX approach and how it’s creating a lasting impact for them. Small landowner Woody XX shared his story: 

“We are a small private school with students from 50+ countries and the money we hopefully make from the sale of carbon offsets will go to our Environmental Stewardship Program and to teaching future generations. We are in the southern Appalachians, one of the most biologically diverse spots outside the tropical rainforests, and the protection of the local flora and fauna is a significant part of what we do.” 

Forest carbon auction

We recognize that every acre of forest is different. Forest composition and timber values differ widely, but an even more important consideration is that, landowner motivations differ widely, too. So instead of telling landowners what the price of carbon should be, NCX empowers landowners to tell us what the price should be. 

This has several important benefits. First, we’re in a climate emergency. By comparing the prices that different landowners bid into the auction and then selecting the lowest ones, we ensure that society’s climate dollars are spent where they have the most impact. The total climate impact of society’s mitigation budget will be maximized when it’s spent well and flowing to the most efficient carbon sinks.

Second, an auction helps ensure equity for landowners. NCX runs a “uniform price auction”, which means that every landowner is paid the same price for their harvest deferral. This construct makes it fair and simple for landowners—simply decide on the right price for you, and bid. If your bid is accepted, you’re paid the market-clearing price, which is higher than your bid price for nearly all bidders. If your bid doesn’t clear, then you haven’t missed out on anything because “your price” was higher than what the market could pay. It’s not a “first come, first serve” system, so landowners don’t have to do extensive research or pay any upfront costs to enroll. All they need to do is understand and express their own motivations and the auction does the rest. 

The failure to put forest carbon on the same economic footing as timber is being solved with our Natural Capital Exchange. NCX empowers every size landowner to participate in forest carbon marketplaces through one year contracts, no set up costs and no acreage minimums. This is providing an alternative revenue source for thousands of small businesses and families in communities that need it most. 

Our approach connects corporations to the landowners, habitats, and communities they impact through a transparent marketplace. Enabling net-zero pioneers to make verified climate impact and landowners to realize the full set of values their forests hold.

The Natural Capital Exchange was established by NCX in 2019. A pilot program was launched in Pennsylvania in which 21 landowners representing about 67,000 acres were enrolled and contracted to defer harvests corresponding to about 100,000 tons of carbon. The expansion of the market to 10 states in the US South happened in March 2021, creating the largest forest carbon project ever by acreage in the United States, resulting in 1.17 million acres of timber not being harvested. This deferral is expected to have a climate impact equivalent to taking nearly 30,000 cars off the road for one year. 

By the end of 2021, NCX will expand to the entire continental U.S. and by 2022 will expand globally. 

Ton-year accounting

With traditional forest carbon projects, buyers pay upfront for continuous impact 20 to 100 years into the future. With innovative approaches to carbon accounting, like the ton-year methodology, NCX ensures present value, with equivalent impact of 100-years of carbon sequestration in one year, eliminating the concern that multigenerational contracts will deteriorate or natural processes like fires will reverse the climate impact.

Data-driven and measurable co-benefits 

Basemap has mapped out 600 million acres of forest across 48 states and includes habitat suitability metrics for several wildlife species. In addition to carbon credits, we are reporting on wildlife habitat as a co-benefit to carbon. 

Changing the industry

ProPublica and Bloomberg have recently published articles examining forest carbon projects that failed to drive their intended climate impact. Our CEO started NCX to solve these issues recognized within the industry. By using acre-level baselines and ton-year accounting, NCX will raise the standard for quality forest carbon credits.

NCX has received concept note acceptance from Verra on the methodology titled “Methodology for IFM/ERA through Targeted, Short-Term Harvest Deferral” for calculating the climate impact of forest carbon:

“Verra is excited about the potential of NCX’s methodology, in particular its incorporation of tonne-year accounting and its use of remote sensing to improve measurements both for baselining and for project monitoring. We believe this approach has the potential to unlock greater supply, reduce monitoring costs, address issues of project reversibility, and increase transparency in forest carbon markets.” 

While our solution benefits the global population by reducing carbon emissions, NCX directly impacts the hundreds of landowners enrolled in our exchange and multiple corporate buyers who purchase the subsequent carbon credits. 

Currently, we have over 2,000 landowners who have enrolled for assessments, 900 who have submitted bids and just under 600 who will be officially participating. In the next year, we expect to be working (i.e. under contract for a harvest deferral) with 20K landowners and 300K in the next five. 

Presently, we have 7 corporate buyers, ranging from small start-ups to some of the largest multinational corporations in the world. In the next year, we expect to be working with 40 buyers and 500 in the next five. 

Small landowners who previously never had profitable access to forest carbon markets can make a real positive impact on the climate all while generating a new stream of income. Corporations can purchase credits with the confidence that their dollars are driving real climate impact. 

We determine the growth and success of our Natural Capital Exchange through the climate impact we’ve enabled and the economic democratization we’ve delivered. We measure climate impact by measuring acre by acre the amount of trees on the landscape of an enrolled property at the start and end of a yearly enrollment period. This allows us to verify that real climate impact is being made.

We also measure progress by the number of participating landowners over time. In particular, we track how many of our participating landowners in the exchange are small landowners, as ensuring landowners of all sizes can participate in the marketplace is of great importance to us. For example, our first commercial cycle of the exchange had over 100 participating landowners in total, with 93 of those being small landowners who were traditionally excluded from the market. We define success as not only growing the total number of participating landowners, but ensuring that we are inclusive which means a large portion of those landowners are small businesses and families.  

Over the past decade, CEO, Zack Parisa, has developed and pioneered precision forestry tools that are revolutionizing the way that forests can be measured, valued, and managed. He is a forester and biometrician by training and has worked in forests all over the world, from Brazil and Turkey to America and Armenia. Zack developed NCX’s core forest measurement technology while earning an MFS from the Yale School of Forestry. He founded NCX to commercialize his research and make forest carbon markets accessible for all landowners. 

Zack and NCX’s other co-founder, Max Nova, took their combined skills in forestry and computer science and built a team of foresters, data scientists, and changemakers dedicated to expanding our understanding of forests and strengthening our ability to manage these complex and vital ecosystems.

Uniquely positioned to build the Natural Capital Exchange, NCX has spent the last decade becoming America's leader in precision forestry and the trusted source of forest data for many of America's largest timber companies, conservation groups, and state and federal agencies.

Our foundation built on data, science, and forestry means precise measurements for every acre, every year.

Our data science team is led by Nan Pond, who has a PhD in Forest Biometrics and on her team are five data scientists, two with PhDs and three with Masters degrees. Collectively, our team has a deep forestry background through education and trade, which allows us to develop solutions that are fitting for the industry.

At NCX, we believe solving the current climate crisis will take all of us. We strive to be inclusive in every area of our business and are proud of the steps we’ve taken so far, while continuing to dedicate our efforts to doing more.

NCX has strong female representation on our team across every department within the company. Our heads of marketing, business development and data science are all women. Some of these women came together to create a “Women of NCX” group that meets monthly, where all female team members are welcome to attend and discuss issues of their choice. As our team continues to grow, we want women who may be in more male-dominated teams to have the opportunity to regularly connect with their female co-workers and have a space where they feel comfortable to speak on issues specific to women or broader issues in general such as work-life balance and gender-discrimination in the workplace. 

 As part of our dedication to inclusivity, especially within our leadership team, we hired a dedicated recruiter who will help us execute our goals of creating a more diverse, equitable and inclusive team. Additionally, in an effort to increase inclusion on our cap table, we included a PoC syndicate in our recent Series A financing.

There are several reasons NCX would like to be part of the Solve community. Firstly, we look forward to the opportunity to join a group of fellow companies that can serve as a trusted support group offering guidance and advice. We hope to connect with this network of goal-driven leaders across industries and sectors. Furthermore, gaining access to mentorship, coaching and more from experts.

Secondly, we hope to gain exposure in the media and at conferences to further promote our solution to landowners and companies across the globe. We believe this heightened awareness will give us more credibility that we need to effectively engage policy makers. 

We hope to collaborate and innovate with fellow solve members to tackle large climate initiatives, such as EcoAdvisors and the United Nations Environment Programme, in order to create a more sound and trustworthy market for climate action.