Restoration of forests, wetlands and other habitat that offset carbon dioxide emissions by cars and factories could raise million of dollars for Alaska, according to Rep. Ethan Berkowitz, an Anchorage Democrat.
Under a new global commodities market, manufacturers and other companies that emit greenhouse gases can purchase credits from entities that offset such emissions through methods such as reforestation.
Berkowitz's proposal, heard Monday by the Senate Resources Committee, directs the state Department of Natural Resources to investigate how Alaska can participate in trading greenhouse commodities. He said there is potential for generating $450 million in revenue for the state.
Berkowitz said international pollution agreements such as the Kyoto Protocol have established limits on the amount of carbon dioxide that can be emitted into the atmosphere.
"Even if the U.S. does not sign the protocol, in order to conduct business with signatory countries, U.S. companies will need to either reduce their carbon emissions below the baseline established in the Kyoto Protocol or obtain carbon sequestration credits to offset the amount that exceeds the established level," according to a sponsor statement by Berkowitz.
Tim King, director of the Carbon Technology Transfer Center in Washington state, said international oil companies such as British Petroleum, Amoco, Shell, Texaco and Exxon have carbon credit divisions that invest in projects such as reforestation to mitigate greenhouse emissions.
He said tree planting projects in Washington state have captured $100 to $200 per acre for landowners that have reforested their property.
And an emerging market in Chicago, known as the Chicago Climate Exchange, trades carbon credits to various energy companies for about 95 cents a piece, King said.
"There's no set system as yet here in the U.S., but Sydney, London and Tokyo have a fairly set carbon market," he said. "And the carbon credits in Europe sell for about $3-$4 a credit."
Each credit accounts for about 1 ton of carbon dioxide, King said.
Restoration of one acre of spruce trees devoured by bark beetles in the Kenai Peninsula would probably equal about one carbon credit each year, King said. But that acre continues to have value every year that acre of land is being managed, he said.
The Senate Resources Committee still must approve Berkowitz' House Bill 196 before it goes to the full Senate for consideration.
Timothy Inklebarger can be reached at email@example.com.