Red and blue states see green in forest offsets
Presented by
THE BIG IDEA
TREE COVER CHARGE — The siren song of carbon offsets is luring officials around the country to open up their states’ forests by swapping supposed emissions reductions for cash.
Alaska Gov. Mike Dunleavy (R) is proposing a bill this session to create an offset program for emissions reductions from keeping state forests intact, Jordan reports. It’s the latest sign of a gold rush that’s inspiring the public sector to try to fill private-sector demand for emissions reductions.
The interest is being driven partly by energy giants like ExxonMobil and ConocoPhillips, which are looking to offset their in-state activities and reach net-zero targets. State officials are also looking to diversify their revenue sources beyond oil and gas production.
“The only way that these companies are going to be able to actually hit those targets is through carbon offsets,” Alaska Natural Resources Commissioner John Boyle said in an interview ahead of the bill’s first hearing this Friday. “There’s obviously debate amongst those in the climate community whether or not these carbon offset projects are really part of the solution to working towards a zero carbon future. But in our estimation, we see the demand.”
There is debate, indeed.
The same issues are at play in state legislatures as in the voluntary markets: Whether the projects lock up enough carbon over a long-enough time to be worth investing in — and whether they’re attractive enough to landowners to get them to agree to keep forests intact. With state-based projects, there’s also a concern that taxpayers might be helping fund companies’ emissions reductions.
“There is a risk we run of privatizing the economic benefits and socializing the costs that must be mitigated,” said Ivy Spohnholz, a former member of the Alaska Legislature who now serves as state director for The Nature Conservancy.
That tension between quality and profit doomed a bill in Washington state last month — the timber industry argued the state would get less money than if it harvested the trees and that locking up timber supplies would drive up prices, while environmentalists objected to an amended version that they said would have limited projects’ emissions benefits.
As we’ve written, whether or not these types of projects are BS, they’re going to keep being proposed.
“I think the interest now is probably greater than it’s ever been,” said Tim O’Hara, vice president of government affairs at the Forest Resources Association, of states’ interest in earning money from forests through the form of carbon offsets.
WASHINGTON WATCH
THEM’S THE BREAKS — Only 14 of the 91 electric cars and trucks currently available in the U.S. will be eligible for federal tax credits under the list the Treasury Department released Monday, Tanya Snyder reports.
GM, Ford, Stellantis and Tesla are the big winners thanks to their mostly domestic content. Losers include European and Asian companies such as Volvo, BMW, Volkswagen and Nissan.
The winnowing represents at least a temporary, self-imposed obstacle for President Joe Biden’s goal of pushing for a major shift from fossil fuels to electric. But a federal official said that nearly 60 percent of electric vehicle sales from the first quarter of the year would have met the new requirements.
Just two EVs now on the market will be available for less than $25,000 after the tax credit — the Chevy Bolt, whose cost could fall to $19,000 thanks to the tax break, and a utility vehicle version of the Bolt.
Click through for a handy guide to which vehicles will qualify for the credits.
EXTREMES
HURRICANE ALLEY — Increasingly severe storms are threatening to spark an insurance availability crisis across the Gulf Coast, Thomas Frank reports for POLITICO’s E&E News.
Texas is the latest state to to feel the effects of the insurance industry’s ongoing contraction in the Gulf area after huge losses from recent storms and litigation. Florida and Louisiana have gone first, losing insurers and seeing huge growth in their state-chartered insurers of last resort.
The Texas Windstorm Insurance Association, the state-chartered insurer that covers wind and hail damage in 14 of the most-exposed coastal counties, could become insolvent after just one major storm, analysts say. A consultant projected recently that a worst-case-scenario storm this year would generate $5.2 billion in claims on the program. That’s $1 billion higher than the projection for last year. And it only has $192 million in reserves.
Property owners might get stuck holding the bag.
“There’s nothing behind us. There’s no state guaranty fund. There’s no obligation from the state of Texas,” Ron Walenta, a TWIA board member, told fellow board members at a January meeting. “One bad storm, that’s it.”
Sustainable Finance
WHAT’S IN A NAME — Green groups aren’t happy with the EU’s decision to label nuclear energy and natural gas as “sustainable investments,” Antonia Zimmermann reports.
Eight Greenpeace chapters plan to sue the European Commission today over its decision to label nuclear and gas as sustainable in its so-called taxonomy, which aims to channel investor cash into the green transition. Four other groups plan to file suit at the Court of Justice of the EU challenging just the natural-gas label.
“Instead of hindering greenwashing, it has now become a tool for greenwashing,” said Nina Treu, director of Greenpeace Germany. The suits follow others from NGOs challenging the EU’s sustainability designations for bioenergy, bioplastics and the use of biomass for energy.
YOU TELL US
GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability.
Team Sustainability is editor Greg Mott, deputy editor Debra Kahn and reporters Jordan Wolman and Allison Prang. Reach us all at [email protected], [email protected], [email protected] and [email protected].
Want more? Don’t we all. Sign up for the Long Game. Four days a week and still free!
WHAT WE'RE CLICKING
— Timber giant Weyerhaeuser is pitching itself as a climate champion, trying to sell forestry offsets to other companies, the Wall Street Journal reports.
— Trying to calculate the emissions impact of your diet? Check the Economist’s new banana index.
— Australia’s auto industry is urging the government to go big or go home when it comes to setting emissions standards.
— Remember the Great Pacific Garbage Patch? It’s not great for humans, but apparently just fine for anemones and barnacles, the WSJ reports.
Follow us on Twitter
Follow Us
