Ecologist sees flawed system
Albany’s Alcove Reservoir carbon credit deal used as example of issue with offsets
When a clutch of local officials and dignitaries gathered in late 2019 to celebrate the first check they received for protecting the woodlands around the Alcove Reservoir, they hailed the deal as a win for the environment locally and globally.
The Albany Water Board had agreed to protect the approximately 6,400 acres of forest around the reservoir in exchange for annual payments from the sale of carbon credits.
It was one of the first local examples of an emerging market in carbon credits, or offsets, designed to protect forests, which absorb carbon dioxide from the atmosphere and combat global warming.
The carbon capture represented by preserving the forest was sold on the American Carbon Registry, a leading market for such credits.
Carbon credit buyers, be they factories in Tennessee, power plants in Ohio, Texas-based airlines or other such enterprises, can claim that the pollution they are generating is offset by their payment to preserve a patch of forest, in this case, the woods around the Alcove Reservoir in southern Albany County.
The trouble is, the Alcove’s forest was never slated to be clear cut or developed.
That’s one of the criticisms of the deal leveled by a leading ecologist, who is among a growing group of environmentalists who are questioning the use of carbon credits as they are currently configured and marketed.
“It seemed too good to be true,” said Charles Canham, an emeritus forest ecologist with the Cary Institute of Ecosystem Studies in Millbrook, Dutchess County. He started investigating the deal more than a year ago.
His conclusion: The Alcove carbon credit deal is an example of what’s wrong with the carbon credit market in general.
“I really don’t mean to pick on the Nature Conservancy or the Albany Water Board but this is a project that’s close to home and one that I’ve been to enough times that I can try to explain exactly what the problems are,” Canham said in a recent webcast about the issue.
The Nature Conservancy helped broker the deal in which
the Albany Water Board agreed not to clear cut or heavily log the land around the reservoir in perpetuity.
In return, the board will get close to $1 million over the next decade.
But with no existing plans to cut down the forest, it’s unclear what additional environmental benefit comes from the sale of carbon credits.
“The Albany water board actually says quite clearly in their documentation that they haven’t (heavily) logged in the past and that they have no intention of logging in the future,” Canham said.
So in effect, deals like this allow some distant polluters to buy the right to say they are battling carbon-based climate change without really cutting their emissions.
Other than buying the credits for something that was going to happen anyway Alcove forest preservation — they can claim they have contributed to carbon reduction.
Canhamkljj said he believes deals like this are an example of how “entrepreneurial zeal is ahead of the science.”
Canham stressed that he wasn’t blaming the Albany Water Board for selling carbon credits.“They are entirely blameless,” he said.
Actually, they would be remiss to pass up a significant cash infusion for essentially making no real changes to their management. It’s like free money — which they are putting toward other improvements and conservation efforts.
“We take that money and it goes to help us manage the watershed,” explained Albany Water Commissioner Joe Coffey.
The money will help pay to protect the streams that flow into the reservoir, to ensure the water remains clean and make sure the surrounding forest remains healthy.
They are also planning easements so people can access parts of the forest. “We see that as kind of a home run,” Coffey said.
But Canham sees a number of problems. He questions the accounting and underlying assumptions that went into this and other carbon offset arrangements.
For example, in calculating the amount of carbon being sequestered — or stored in the forest rather than lingering in the atmosphere — carbon brokers use a baseline prediction of how much cash the forest owner could get if he or she were free to do anything they wanted with the land to maximize their profit.
Based on that, the forest owner would clear-cut the entire 6,400 acres and put the money in the stock market or some other financial vehicle. But since that wasn’t going to happen anyway, this approach to valuing the carbon credits is spurious at best.
“The method almost leaves me speechless,” said Canham.
He also points out that carbon offset brokers are using increasingly exotic algorithms to calculate the value of forest land their owners are paid to leave untouched.
Artificial intelligence is being used to help determine forest land value and carbon sequestration but these reports aren’t peer-reviewed by actual foresters or biologists like a scientific paper would be.
In that sense, part of the carbon offset industry is mimicking the various opaque financial derivatives that Wall Street relies upon, even after the 2008 financial crash.
Canham is not alone in his critique.
“Making Climate Policy Work,” a 2020 book by Danny Cullenward and David Victor, professors at Stanford and the University of California, San Diego, look at carbon credits and conclude that government regulators need to target specific industries, such as power generation, and prompt them to reduce emissions.
Simply allowing brokers to trade in carbon credits is like waving a magic wand toward climate change without getting results, they argue.
No one here is saying that forests don’t need protection. Mass deforestation in places like
Brazil and other tropical lands has raised legitimate concern about the loss of large global carbon sinks.
But the eastern U.S., particularly the Northeast, is different.
The East Coast is one of the most heavily forested places in the nation and is estimated to provide 85 percent of the U.S. forest carbon sink, Canham said.
Much of that, especially in the Northeast, is from the regrowth of forests that were cleared for farms or timbering in the 18th and 19th centuries but which have reverted to woodlands as people and industry have shifted to the Sun Belt.
That is unlikely to change, meaning there’s little hard justification for paying people not to clear-cut forests that weren’t going to be clear-cut anyway. The concept of carbon offsets is coming under question by several environmental groups. But some activists are hesitant to criticize it, especially if it’s close to home.
When asked their opinions on the Alcove Reservoir deal, several never called back or didn’t want to comment, since it involves a major environmental group they often are allied with — the Nature Conservancy. The Nature Conservancy didn’t return calls for comment by press time.
In an earlier interview, the group’s CEO, Jennifer Morris, said carbon pricing is helping to clean up the environment.
“Carbon projects have played a tremendous role in financing innovative projects for communities on the front-lines of the climate crisis,” she told Ecosystem Marketplace, an organization that tracks the carbon offset industry, which is becoming a $1 billion-a-year market.
New York state appears to recognize that carbon offsets have their limits, or at least require some regulatory guardrails.
The 2019 Climate Leadership and Community Protection Act, which sets out ambitious carbon reduction goals in coming years, addresses some of the criticisms. In future years, once rules are finalized, carbon offsets will not be allowed for waste-to-energy plants, for instance.
And sellers of credits will have to be within 25 miles of the emission source being offset.
For now, carbon credit sales like the Alcove Reservoir will persist since businesses are anxious to say they have reduced their carbon footprint, even if it’s by buying credits rather than cutting emissions.
“There is enormous interest in this because all of these corporate boards have decreed that they want to become carbonneutral,” Canham said.
“Instead of actually going out and reducing emissions they are going out and buying offset credits at a very cheap price.”