House Resources Committee hears testimony on carbon credits

Gov. Dunleavy proposed H.B. 49 as part of a suite of bills aimed at changing the course of resource development in Alaska
FastCast digital headlines for Friday, March 17, 2023
Published: Mar. 17, 2023 at 10:11 PM AKDT
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JUNEAU, Alaska (KTUU) - The latest round of testimony Gov. Mike Dunleavy’s proposed bill to open up public lands to a carbon offset program, took place in the House Resources Committee to aid lawmakers working to better understand how it works and how it could impact Alaska.

Testimony was heard from Anew, a company that maintains a portfolio of organizations engaged in the carbon credit marketplace. They discussed the feasibility of a potential carbon offset pilot project on 43,000 acres — about twice the area of Manhattan — in the Haines region of Alaska, in addition to certifying credits and evaluating the quality of state forests.

A carbon credit is a license for an individual or organization to emit greenhouse gases, such as carbon dioxide, into the atmosphere so long as the purchaser also invests in mitigation strategies to offset the environmental harm from those emissions.

Proponents of carbon management programs say the carbon credit system is a way to put a price on pollution and incentivize individuals and businesses to reduce their carbon footprint and invest in cleaner technologies.

Lawmakers at the hearing learned about the intensive process involving third-party auditors to evaluate the credits, and how companies like Anew will pay the upfront verification fees — if a proposal for a credit program is successful, only then will they be reimbursed by the public.

The discussion also covered how to balance the needs of the timber industry and the limitations the proposed carbon offsets legislation could place on forests on public lands, explaining how trees would assume both a timber value and carbon value. and that companies like Anew work to ensure that so-called “trash lumber” doesn’t get erroneously counted as healthy, and suitable for a carbon credit program.

According to the Resource Development Council, the timber industry once dominated Alaska’s economy in the 1970s, until the oil boom instigated major economic and manufacturing shifts in the state.

Rep. Jennie Armstrong raised the point that Alaska’s forests are not substantially profitable for the state and that might continue.

“I’m confused how we can make billions from something that we only make millions from right now. So you can see that we have very few acres — Alaska is not a big logging state — and so we’re not the most appealing state for this type of program,” Armstrong said.

She expressed doubt in the profitability of projects like this one.

“It’s a little bit sus, as the kids would say. It’s kind of a ... kind of a scam,” Armstrong said.

Later during the hearing, Special Assistant to the Commissioner of the Department of Natural Resources Rena Miller testified about efforts to keep the legislative process open to bring carbon management to public lands in Alaska for the first time.

“We can remove land from a project,” Miller said. “We would need to repay credits issued to date for having stored carbon on that since it is no longer storing carbon, and we can also terminate the project as a whole. Again, with financial repercussions, but we do have those options.”