The Dunleavy administration has finalised regulations to initiate the sale of carbon offset credits on state land. Following the Legislature’s approval of Senate Bill 48 in May last year, the new regulations will be effective from 19 July 2024.
A nature landscape view of Haines State Forest, Alaska. AI generated picture.
A public process to amend the state forest management plan for carbon offsets has begun in Haines, with the state’s carbon offset programme manager, Trevor Fulton, projecting that it will take another 18 months to two years before credits are sold.
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Governor Mike Dunleavy announced plans to monetise carbon during his annual address in January last year. The framework for carbon offsets on state land was established by SB 48, with additional legislation providing for underground carbon dioxide storage.
Initial revenue projections from carbon credits are modest compared to the potential billions in future earnings. Three pilot projects, encompassing around 75,000 to 100,000 acres each, are planned in Haines State Forest, Tanana Valley State Forest, and the Matanuska-Susitna region. Estimates from 2022 suggest these projects could generate $8 million annually in the first decade.
Revenue from carbon credits will primarily support the state’s general fund, with 20% allocated to renewable energy grants. The programme could see Alaska receiving compensation for forest conservation, kelp farming, and biochar production.
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Alaska’s participation in the global voluntary carbon market is anticipated to involve both state-developed and third-party leasing projects. This market allows corporations to purchase credits to compensate for their emissions.
Despite the potential economic benefits, there are concerns about the effectiveness and measurement of emission reductions from offsets. The Biden administration recently introduced principles to ensure high-integrity carbon offsets.
In Southeast Alaska, the success of carbon offsets will depend on demonstrating measurable environmental benefits. Conservationists emphasise the importance of protecting old-growth forests and enhancing forest management practices to increase carbon stocks.
As Alaska moves forward with its carbon offset programme, the balance between economic interests and environmental conservation remains a critical consideration.
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