🇺🇸 Alaska lawmakers consider using forested lands for money-making carbon credits

A bill to set up a carbon-credit system is a high priority for Gov. Dunleavy, but details about how and if it would work are yet to be determined.

By Yereth Rosen, Alaska Beacon

Legislators are considering whether Alaska, one of the places in the world most transformed by climate change, can be a solution by keeping habitat intact.

That is the idea behind an initiative by Gov. Mike Dunleavy, who has introduced and is championing two bills that would put Alaska on the path to what he describes as a money-making opportunity through carbon conservation and sequestration.

One bill would set up a system for investors to lease forested land in Alaska with the purpose of keeping it intact so that it continues to absorb carbon from the atmosphere. In his Jan. 23 State of the State speech, the Republican governor called that concept “an absolute game-changer.”

“Experts in this emerging industry have informed us that we can realize revenue to the tune of billions of dollars per year by creating a carbon management system. We’ve been told by some that we can generate as much as $30 billion or more over 20 years, just from our forest lands,” he said at the time.

The proposal is spelled out in a bill Dunleavy introduced, Senate Bill 48 and House Bill 49, that would set up a system for investors to lease tracts of forested land for up to 55 years to preserve their function holding carbon, known as being a “carbon sink.” It has been dubbed by lawmakers the “tree bill.” A related bill, aimed at setting up a system for storing and sequestering carbon from oil and gas facilities and potentially power plants and other industrial sites in little-used oil wells, is known as the “hole bill.”

The “tree bill” is the one that has moved most quickly this session. Both versions, Senate Bill 48 and House Bill 49, are in their respective finance committees. Some amendments were made along the way, most recently in Senate Finance, which is preparing to send the bill to the floor.

Senate Majority Leader Cathy Giessel, R-Anchorage, said Dunleavy has stressed to her the carbon credit bill is a high priority.

“We definitely understand the importance of that bill to the governor. We think that, certainly, the amendments that we made improved the bill, and we’d like to see it actually pass,” she said at a Thursday news conference. That would involve working with the House on its own version, she said. “We’re hoping we can meet in the middle and get that bill to the governor before we adjourn.”

The economic potential of the proposal is unclear.

Dunleavy’s reference to billions of dollars notwithstanding, his administration has not released any estimate for revenues generated. Officials from the Department of Natural Resources, which is managing the proposal for the administration, have said it would take years for any projects to occur. Once a system is set up, about the fastest that any projects could come into being is likely 18 months, John Boyle, the department’s commissioner, told lawmakers during a May 8 Senate Finance Committee hearing. The department has estimated the costs of the program, according to fiscal notes: combined administrative and fire-suppression and related costs close to $350,000 the first year, increasing somewhat in future years.

There is debate about the effectiveness of carbon offsets like those proposed through Senate Bill 48 and its companion House version. They are seen as necessary globally to reach carbon emissions goals, but to be of value in the fight against climate change, they must stop development that would otherwise occur, or they must enhance carbon-absorbing properties that would otherwise be lost. Without tangible benefits, projects can be dismissed as public-relations “greenwashing.” To be effective, projects must also rely on defined and verifiable systems to measure, monitor and trade carbon.

For Alaskans, a key question is whether any carbon-releasing activity or processes in state forests would be stopped through a program established by Senate Bill 48 or its companion House bill.

Alaska has three designated state forests comprising 2% of state-owned land. Most state-owned forest land, whether in those designated forests or outside of them, is boreal habitat, which has not supported logging in Alaska other than on a small scale. That contrasts with the lush Southeast Alaska rainforest, where trees can grow to huge sizes and where logging has been done on an industrial scale. There, the regional Native corporation, Sealaska, in 2018 became the first Alaska entity to use California’s cap-and-trade program to sell carbon credits.

Boreal forests around the North have long been some of the world’s most important carbon sinks. They hold 30% to 40% of the world’s land-based carbon, mostly in their soils, according to NASA. But they also release carbon through wildfires. The force that threatens to convert boreal forests from carbon sinks to sources is not direct human development within them but by the increasing frequency and intensity of wildfires caused by climate change, according to scientists at NASA and elsewhere.

There is evidence, such as from a study of Alaska and Canada boreal regions over three decades of intensifying wildfires, that boreal forests are already transitioning into net carbon sources. Of particular concern is the potential for carbon release from thawed permafrost that can be disrupted by deep-burning fires. Permafrost collapse through wildfires has been documented in Alaska, in the Tanana Flats region in the Interior, for example.

That leads to a question: How would any human intervention achieved through a system set up by Senate Bill 48 stop the carbon-releasing effects of increasing and intensifying wildfire?

One potential answer is use of wildfire mitigation as a carbon-capture tool. The idea of selective logging and other steps that might prevent severe wildfires is appealing to one Republican House member with leadership positions in three committees.

“They are paying us not to cut the trees down. But also, they are paying us to manage the forest,” said Rep. Kevin McCabe, R-Big Lake, who represents a district filled with vast tracts of trees killed by a spruce beetle infestation.

Under the carbon bill, those fire dangers could be selectively removed, he said.

“It all kind of sounds like voodoo economics, if you will,” he said, waving his hands. “But it’s not.” It can be “an effective tool” that would force better management of the forests, he said.

Still, there is some public backlash against the bill.

Despite repeated assurances to the contrary from Department of Natural Resources officials, some have blasted the idea as “locking” up land and preventing development – and have criticized the very concept of climate change.

“This carbon sequestration event that we have sitting before us, it looks to me like it’s an effort to create a solution to a lie that has been perpetrated to us by the federal government. What’s that lie? Global warming,” Dave Maxwell of Palmer said in public testimony during the May 8 Senate Finance Committee hearing.

“We need to be building up our lands for future generations, not locking them up on a manufactured climate-change farce,” said Patricia Bouton in a message sent in March to Giessel.

To assuage those concerns, the Senate Finance Committee amended the bill with provisions requiring that any carbon project consider potential impacts to mining, timber harvesting and other resource development and that state land for carbon management remain open to mineral exploration.

That and other amendments were explained by Ken Alper, an aide to Sen. Donny Olson, D-Golovin, during Thursday’s Senate Finance Committee hearing.

“We are not looking, and DNR is not looking, to lock up state land and prevent other uses,” Alper said.

Alaska Beacon is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Alaska Beacon maintains editorial independence. Contact Editor Andrew Kitchenman for questions: [email protected]. Follow Alaska Beacon on Facebook and Twitter.