Last 12 months, the worldwide carbon offset market hit a record $851 billion, based on analysts at Refinitiv. But within the U.S., there are tens of millions of acres that haven’t been available for carbon projects — positioned on federal and state land. Indeed, there are currently only two carbon projects generating carbon credits on state land; there are none on federal land.
In Michigan, the Big Wild Forest Carbon Project, began in spring 2021, became the primary state land generating credits. Those have been promised to the Detroit-based energy company DTE. The pilot program by project developer Bluesource is on 100,000 acres of land in Pigeon River Country State Forest. It’s generating the credits by switching the parcel to sustainable forest management techniques. In accordance with the developer, that recent plan harvests 35 percent less timber than the baseline management plan would have allowed over the following 40 years. (Neither the Michigan government nor Bluesource would confirm the value DTE is paying for the credits).
“We’re generating revenue from carbon from standing trees versus from harvesting timber,” said Josh Strauss, executive vp of nature-based solutions at Bluesource.
The second project was announced in early April in Washington state. There, the Department of Natural Resources will protect 10,000 acres, creating 900,000 carbon offset credits in the primary 10 years. The primary 2,500 acres have been identified in King Blackcomb, Grays Harbor and Thurston counties.
The Washington state government is partnering with a distinct project developer, Finite Carbon. The project differ in a couple of key ways. While Michigan continues to be planning to reap some timber on the land, Washington has pledged not to reap these lands in any respect in the long run. What’s more, Washington has said it would use funds raised by selling the credits for schools which can be a part of the department of natural resources’ trust beneficiaries.
Not many private landowners have 4 million acres of forest. I believe that creates an enormous opportunity for the states to assist fill the demand [for carbon credits].
Each projects are reporting to American Carbon Registry. The Michigan project uses SCS as its verifier. Washington’s project developer Finite Carbon has not chosen a verifier yet, but it would be one among the entities approved by American Carbon Registry.
With a view to create a carbon credits program on state land, Washington state needed to create a recent progressive mechanism for assigning value to a forest product. In accordance with Csenka Favorini-Csorba, senior policy advisor for climate and community resilience on the Department of Natural Resources, the state traditionally defines the worth of forest materials by way of the way it is faraway from the landscape as lumber.
So the federal government created a recent leasing structure for these carbon projects that offers the lessee certain rights to the land. Under the brand new carbon project, the lease gives buyers the best to go away the trees standing and claim the revenue from the carbon credits created. Washington state is not going to sell the credits directly; it would work with a 3rd party to discover corporations interested. The credits for its first projects haven’t yet been promised to any buyer.
Unlocking the vast amount of state lands for carbon projects might be an enormous win for the climate, if the projects are proved to be actually additional. Given how much land is offered, some imagine a shift of this nature could drastically change the provision and demand dynamics of the carbon market because project developers wouldn’t need to go individually from private landowner to non-public landowner to piecemeal together large amounts of acreage.
“Not many private landowners have 4 million acres of forest,” Strauss said. “I believe that creates an enormous opportunity for the states to assist fill the demand [for carbon credits].”
So what does it mean to administer a carbon project on state land compared to non-public lands?
“Because we’re a state agency, we essentially cannot make the identical arguments that a personal entity would,” Favorini-Csorba said. “We’ve got existing laws and conservation policies, so we won’t just make the argument that these forests might be parking lots tomorrow.”
In accordance with Favorini-Csorba, which means state baselines for these projects can’t be some hypothetical worst-case scenario. They’re based on real documentation for planned timber harvests.
“We’re generating fewer credits than a personal entity might with the identical kind of project. But our calculation of additionality is way more robust. And since of that, we’re hoping to also see a better price for these credits,” she said.
Bluesource’s Strauss said the identical thing concerning the Michigan project. Its baseline calculations needed to bear in mind what was permissible under the state’s general mandate for public land, which incorporates keeping parts of the forest standing for recreational and wildlife purposes. Unlike private land that might be leveled on the whim of 1 private land owner, public lands have government bureaucracy to navigate.
“We’re managing our state lands for gas and oil production, wildlife habitat, outdoor recreation,” said Scott Whitcomb, director of the office of public land in Michigan. “So now carbon is layered on top of that.”
We’re managing our state lands for gas and oil production, wildlife habitat, outdoor recreation. So now carbon is layered on top of that.
Washington and Michigan need to be a source of high-quality credits with strong additionality claims. “Buyers are legitimately concerned concerning the reputational risk of getting into a project which may not be robust,” Favorini-Csorba said. “I believe our project represents the following generation of carbon projects that buyers may be really confident in.”
But reporting from Bloomberg Green challenges the claims that carbon credits on state managed forest lands will probably be of upper quality. In accordance with public records and emails from Whitcomb obtained by Bloomberg, the Michigan government has assured timber corporations that the carbon project is not going to decrease harvest rates. Whitcomb told GreenBiz that while harvests have been lower for the past few many years, they follow a boom and bust cycle where the trees are all cut at the identical time. As we’re currently in a growth stage for the trees, it is feasible this is the reason Witcomb felt he can assure timber corporations that there won’t be changes to the present level of timber harvesting. The carbon project is searching for to mitigate a big upcoming harvest.
“Our management seeks to flatten out those curves and extend [those cycles],” he said. “However it takes aggressive management.”
But Strauss told GreenBiz (with Whitcomb present on the decision) that the brand new management strategy for the Pigeon River Country state forest does include a 35 percent decrease in harvesting.
Bluesource can be beginning to work on a carbon project in Wisconsin. In accordance with the Bloomberg story, forest managers there don’t expect changes to their timber management attributable to the carbon project — they’re viewing the proposed credits as payment for previous good deeds. That’s precisely the problem: Programs of this natures are speculated to cause additional carbon sequestration.
Washington’s project, which proposed to finish harvesting permanently, is perhaps a more credible approach. But the identical query persists: Were these lands ever going to be harvested anyway?