Instead of harvesting their forests for timber, the Chugach Alaska Corporation is selling an innovative new forest product: the carbon stored in the trees.
“Anyone who’s been to Prince William Sound can tell you it’s an area of tremendous beauty,” Josie Hickel said. Hickel is Senior Vice President of Chugach Alaska Corporation. “Glaciers, forested acres, wilderness areas. The area is full of wildlife and birdlife, and the fishing is obviously fantastic.”
Among Chugach Alaska’s 900,000 acres are hundreds of thousands of acres of forest — some of it old growth and a lot of it hard to get to. Instead of selling their trees directly, they’re selling the carbon stored in those trees. There’s a market for this in California, and it recently opened up to Alaskan landowners.
“The major emitters of greenhouse gas have to have a permit or an offset for every ton of pollution they emit in the state of California,” Brian Shillinglaw with New Forests said. New Forests is the group in California that will help Chugach manage its carbon assets.
Maybe you’ve heard California’s system called “cap and trade.” There’s a cap — or a limit — on how much pollution companies can emit and then there’s a trade for anything above and beyond the cap.
Think of any excess pollution as a carbon sin. Companies in California can pay to have their sins absolved. That absolution comes in the form of sustainably managed forests in other parts of the country.
“Five million acres of forest land are enrolled in this system nationwide,” Shillinglaw said. “This is the first time there’s been a real market for growing older growth forests. The system will pay you to not cut down your forest and to grow inventory.”
Basically, companies in California can emit more carbon because places like Alaskan forests are storing carbon in exchange.
The California cap and trade market is the largest carbon market in North America, but currently there isn’t enough supply of carbon offsets to meet the demand of California’s polluters. Alaska’s entrance to the market could help change that.
Josie Hickel said other Alaska Native Corporations are considering similar deals, but Chugach’s is the first one that’s been finalized.
Chugach is waiting for spring for a complete forest inventory to take place, but Hickel says they estimate that they have several million carbon credits in their forest land. The carbon market fluctuates like any other market, but right now offsets are selling for around $13 per ton of carbon dioxide emissions. That means that Chugach owns tens of millions of dollars worth of carbon credits that can be sold anytime a California polluter goes over their cap.
In the same deal, on the same piece of land, Chugach sold their right to develop the Bering River coal field to The Nature Conservancy. The Nature Conservancy doesn’t own a lot of coal rights and they’re not planning on doing any coal mining any time soon, according to Rand Hagenstein, Director of the Alaska Program for The Nature Conservancy.
“Our intent is to keep the coal underground in perpetuity,” Hagenstein said.
And keeping that coal in the ground has positive impacts downstream — all the way to the Copper River Delta.
“This area is globally renowned for its wildlife habitat. We all know about Copper River red salmon. Many people are also aware that this is one of the world’s premier migratory shorebird and waterfowl sites,” Hagenstein said. “So, there’s a tremendous amount of biological value there.”
For Josie Hickel, with the Chugach Alaska Corporation, the deal means more than just a new revenue source.
“We need to be able to have financial benefits for our shareholders as well as making sure we have the funding for many generations to come in terms of upholding our heritage and our culture and our language,” Hickel said. “This is a great way to be able to do that.”
This is uncharted territory for Alaskan landowners, but the economic benefits to the Corporation as well as to subsistence and commercial fisheries make California’s carbon market an attractive new frontier.