Additionality risks in Alaska’s proposed forest offsets program

Earlier this week, the Alaska State Legislature passed SB 48, a bill that authorizes Alaska's Department of Natural Resources to enroll State forests in the voluntary carbon market. While we fully support efforts to improve forest management, multiple lines of evidence suggest that Alaska's forest carbon offsets program could produce carbon credits that don’t represent real climate benefits. Repeatedly during the legislative process, proponents of SB 48 have promised that the State can make money from selling carbon without changing harvest practices. Although this could be a win for the State budget, it would be a loss for the climate — and for the credibility of the voluntary carbon market.

A core requirement of carbon offset projects is that they produce new climate benefits, a characteristic called “additionality.” In the case of forests, additionality requires that carbon payments change how a landowner manages their forests in a way that improves carbon storage, for example by extending rotations or decreasing harvest intensity. Carbon credits that instead represent business-as-usual forest management are “non-additional.” Rather than creating new climate benefits, non-additional credits simply reward a landowner for doing what they already planned on doing. When buyers use non-additional credits to make claims about climate progress, it misleads the public and is bad for the climate.

Early indications of potential non-additional crediting in the Alaska context emerged from a State-commissioned report written by the offset project developer Anew Climate.¹1Anew Climate (2022) Carbon Offset Opportunity Evaluation In the report, Anew outlines three forest carbon pilot projects, which would be credited based on the difference between a hypothetical baseline harvest and the observed harvest. In all three cases, Anew provides revenue estimates based on modeling that assumes harvest intensities that are higher than historic levels. For one project, Anew explicitly details how overstating harvest intensity in the baseline scenario can ensure the continuation of the State's business-as-usual harvest plans, stating:

Put another way, Anew's feasibility report describes how the State of Alaska could get paid for not cutting down trees it probably wouldn’t cut down anyway — a non-additional outcome. Proponents might argue that these types of offset projects ensure that future harvests continue to stay below the maximum allowable harvest. However, this logic doesn’t hold up in the context of offsetting because it amounts to trading an uncertain climate benefit (possible constraints on increasing future harvests) for a certain climate harm (ongoing fossil CO₂ emissions).

The possibility of non-additional crediting was further highlighted during the legislative process, as lawmakers raised concerns that carbon revenue might come at the expense of timber revenue. They were repeatedly assured that enrolling State lands in offset projects would not affect timber harvests. Earlier this month in a House Finance committee hearing, for example, a representative from the Department of Natural Resources told the committee that “We don’t expect the carbon offset projects to slow timber sales.” When asked again whether selling carbon offsets might require harvest reductions, the State official reiterated, “We don't anticipate a reduction in harvest under the improved forest management protocols that we would be doing on those on those [sic] forests.”²2See the exchange between Representative Andy Josephson and Rena Miller, an official for the Department of Natural Resources, at the timestamp 2:52:40pm. This assurance was made yet again in a press release from Governor Dunleavy's office commending the bill's passage, which specifically highlights that the bill “will not prevent or halt any natural resource development on State lands.”³3Office of Governor Mike Dunleavy (2023) Legislature Passes Governor Dunleavy’s Carbon Offset Legislation

Concerns around non-additional offset projects involving public forests have come up before. Last year, reporting by Bloomberg raised questions about the additionality of several offset projects on public lands in Michigan and Wisconsin.⁴4Ben Elgin (2022) U.S. Public Forests Are Cashing In on Dubious Carbon Offsets Bloomberg At least one of the projects discussed in that story was developed by Anew (then doing business as “Bluesource”), the same firm that authored Alaska's forest carbon offset feasibility study. Taken together, these cases may suggest the emergence of a broader pattern of non-additional offset projects on public land.

It's not surprising that cash-strapped governments are tempted to generate carbon revenue in exchange for minimal changes in how they manage public lands. However, the explicit contemplation of pursuing non-additional carbon projects in Alaska highlights the weak rules that currently govern the voluntary carbon market. The rules need to be better. Until then, we recommend buyers steer clear of non-additional credits like those being contemplated by Alaska and we urge decision makers in other states to think twice before pursuing non-additional projects of their own.