Can Alaska earn money from protecting its state-owned Lands? Gov. Mike Dunleavy and state legislators are hoping so.
With staff and lawmakers during the Alaska Sustainable Energy Conference in Anchorage, Dunleavy on Tuesday issued a law directing the state to look into what he called a major revenue stream carbon storage.
“Just like oil, as gas, and just as our timber this is a product that is monetizable and Alaska is likely to be a major player,” Dunleavy said.
It was also a key issue for Governor. In the lead up to this session, he outlined the bill as a means to address the budget problems in Alaska, describing it “a new source of revenue which could be able to compete with the revenues we earn in certain cases through oil.”
The framework is in place, but many questions remain on the way a carbon storage business in Alaska could be like, what amount of dollars it could generate and if there’s a real benefit to the climate.
What is carbon storage?
Carbon emissions, triggered by anything including burning fossil fuels and wildfires, contribute to the climate to change. As efforts to fight climate change increase there’s a growing market for landowners to pay to ensure that carbon is kept out of the atmosphere. One way to do this is by preserving ecosystems that naturally contain carbon, such as forests and tundra.
Alaska is home to a large amount of tundra and forests, and Dunleavy believes, there are a lot of carbon storage methods.
“The magnitude that Alaska offers on this subject is unparalleled,” he said in December.
Dunleavy first proposed two strategies to start getting Alaska on the right track to enter the carbon industry. One plan, which was dubbed”the “hole bill” by legislators, was the idea of storing carbon dioxide underground through a process known as carbon sequestration and capture. This bill didn’t pass this session. But, on the other hand, just minutes before the session was over the legislature passed SB 48, which is known as”the “tree measure.”
The law authorized to the Alaskan state Department of Natural Resources to set up a legal framework to sell carbon offsets, primarily focused on the protection of Alaska’s forests as state forest.
What is an offset carbon?
The concept of carbon offsets is simple: All businesses have an environmental footprint. They use fossil fuels to transport employees or goods or to produce their products. With the increasing pressure to take action on the climate crisis, many businesses are seeking ways to reduce carbon emissions.
One method to achieve this is to pay another person to eliminate carbon dioxide from the atmosphere, or in the sense of reduce the amount of carbon they release.
The principle is: “Someone else has done something beneficial to the climate and this can help be a way to offset my emission,” stated Freya Chay who is the program manager of the non-profit Carbon Plan, which analyzes the climate’s solutions.
Chay stated that the goal of carbon offsets is to bring a significant environmental benefit.
“When we talk about compensating for combustion of fossil fuels we need to remove carbon from the air and store it elsewhere efficiently, and permanently,” she said.
One method of storing carbon dioxide is to store it in natural “carbon sinks” such as forests. The trees pull carbon dioxide out of the atmosphere, and store it by photosynthesis.
The state legislature and the governor are hoping that Alaska gets compensation to help protect its forests. Certain Alaska Native corporations have had success in selling offsets. As more businesses look to reduce their carbon footprint and reduce their carbon footprint, they will increase the need for offsets for carbon is predicted to increase.
How could carbon offsets help Alaska?
The Department of Natural Resources has identified at least three forests in the state it believes could provide offsets. These are in Mat-Su and near Haines, and the Tanana Valley and near Haines.
In an interview in an interview with commissioner John Boyle called it a innovative way of thinking about the forest land of Alaska.
“We consider it as an opportunity to make money from state resources which are not being made a profit,” Boyle said.
The legislation approved by lawmakers isn’t going to generate anything near the amount of oil revenues the state earns -at least, at least, not at this point. (The governor’s estimates also included revenues from his previous plan that didn’t get a vote in the current year.)
The DNR expert estimated that the sale of carbon offsets would bring in around $82 million over the first ten years of the program.
Boyle has a different view. optimistic.”We’re certain that this will generate significant revenue however, we don’t have enough data at the moment to draw a definitive conclusion on the potential revenue,” he said.
The main problem is who will purchase offsets from Alaska. Boyle admitted that he’s unaware of any particular companies that have yet expressed interest. However, as the demand for offsets grows Boyle believes Alaska could be a source of supply.
Are there any climate-related benefits?
As the state progresses with the plan, the carbon plan’s Freya Chay outlined a key issue: does Alaska’s carbon plan actually help the climate?
Carbon offsets can’t be sold off of any forest. To fulfill its goal, the proceeds generated by offsets must allow landowners to safeguard their forest the land from any threat like timber harvesting and development or improve management of the forest to conserve carbon.
Chay stated that so far, Alaska is more concerned with the potential for revenue instead of benefiting from climate change.
“I believe it is very likely that Alaska could profit from the forest carbon offset program,” Chay said. “The main question for me is: what will the program actually accomplish? And what are the cost not just to Alaska’s budget but to the larger systems we’re concerned about?”
DNR Commissioner Boyle stated that the Department is evaluating a variety of options for storing carbon efficiently, such as active land management in order to limit wildfire risk or plant trees. DNR is also looking into possibilities for carbon storage in the ocean such as kelp farming, he stated.
However, all of these concepts are still in the early stages. A lot of the specifics governing the carbon market proposal are still to be figured out.
DNR estimates that it will take between six and one year to draft the rules that regulate the market for offsets. The state will have to cooperate with auditors from outside to check the validity of offsets, and put them on the registries.
The offset bill passed with overwhelming support both in and in both Alaska Senate and House -even from lawmakers who do not consider climate an issue.
“Whether whether you are a climate skeptic or not, this the way the actions are played across the globe,” Rep. Tom McKay of Anchorage, a Republican, who is chair of the House Resources Committee, told colleagues shortly prior to the bill’s final vote last week.
“It’s important that Alaska participates, because many other states are taking part and we’re missing out on the boat if we’re not involved,” McKay said.
Senator. Cathy Giessel, R-Anchorage Chairperson of the Senate Resources Committee, stressed that this bill is just the first step in the process.
“Not all questions have been addressed in this particular topic – I’ll refer to it as an industry” Giessel said in an interview with Alaska Public Media “There’s still lots of unanswered questions.”
