CHICAGO - Staples Inc and Home Depot Inc are collaborating with environmental groups in a pilot program aimed at conserving fast-disappearing Southern U.S. forests, organizers said on Thursday.

Staples, the office products company, and Home Depot, the home products retailer and one of the leading sellers of wood, will provide funding to pay private landowners in Tennessee, Virginia and North Carolina to conserve and manage their forested land.

The amount of money contributed to the project has yet to be determined, but negotiations with landowners are under way, said Danna Smith, executive director of the environmental group Dogwood Alliance of Asheville, North Carolina.

Private landowners, who collectively own roughly 90 percent of forested land across the U.S. Southeast, will be required to place their land into conservation easements and manage it in a way that boosts carbon sequestration, Smith said.

Sequestration in this case refers to the carbon stored in unharvested trees as well as any added trees that absorb carbon dioxide -- the leading greenhouse gas -- from the atmosphere.

The two companies will retire any carbon credits reaped in the transactions, she said. Such credits can be used to offset greenhouse gas emissions to meet regulatory standards.

Smith said native trees are fast disappearing across the U.S. Southeast, which has 2 percent of the world's forests but provides 20 percent of the lumber and pulp for the wood and paper product industries.

Clear-cut forests are often replaced by pine tree farms.

Demand for wood and paper are having a devastating impact on Southern forests, Smith said. Carbon is released and it degrades watersheds and wildlife habitat.

(Reporting by Andrew Stern, editing by Gerald E. McCormick)