Downeast Lakes Land Trust built the Trail to Tomorrow on forest land it bought using proceeds from selling carbon offset credits. Credit: Linda Coan O'Kresik / BDN

The Trail to Tomorrow is a loop located on the outskirts of Grand Lake Stream, a plantation in Washington County that sits a 45-minute drive west of Calais. The nonprofit Downeast Lakes Land Trust built the 0.6 mile educational nature trail, which includes signs naming tree species and explaining local wildlife, on a 22,000-acre parcel the group bought with the help of roughly $4 million it earned from growing trees.

That $4 million didn’t come from paper mills or the timber industry that turns trees into products. Instead, giant corporations operating on the other side of the country spent millions of dollars to make sure these trees stay standing, growing and pulling carbon out of the atmosphere.

But as more and more companies pay Maine organizations such as the Downeast Lakes Land Trust to grow trees that store atmospheric carbon, the debate is intensifying over whether carbon offsets are truly helping mitigate climate change. How the debate plays out will shape how the world tackles global warming. It will also determine how much money from large polluting corporations will flow to Maine landowners.

There is evidence that the benefits of carbon offsets to the climate are overstated and that carbon markets allow large polluting companies to avoid making the tough choices needed to reduce their carbon emissions.

Proponents, meanwhile, point out that offsets are protecting nature and are part of a number of solutions to limit climate change. And Maine stands to benefit from them financially.

“We think Maine is one of the best places in the country for forest carbon,” said Josh Strauss, vice president of Blue Source LLC, which has helped launch seven forest carbon offset projects in Maine covering a total area of nearly 500 square miles over the last decade.

Maine groups like the Downeast Lakes Land Trust have sold more than eight million tons of forest carbon to large corporate polluters in recent years and likely made tens of millions of dollars in the process. Groups like The Nature Conservancy In Maine, The Appalachian Mountain Club and The Passamaquoddy Tribe sold the carbon trapped in their trees on what are known as carbon offset markets, named because they are where large corporations go to “offset” their carbon emissions. Companies that want to reduce their carbon footprint, but are unable or unwilling to reduce their emissions, pay others to grow trees that pull carbon out of the atmosphere.

While California requires corporations to reduce or offset their carbon emissions, more and more companies across the country are voluntarily buying carbon offsets to demonstrate a commitment to combating climate change. Between 2019 and 2020, the offset market grew 28 percent, according to one analysis.

Despite critiques, proponents say the market needs to grow even faster. In November, a task force launched by the United Nations special envoy for climate action called for growing voluntary carbon markets 15 times their current size by 2030 to limit climate change.

Carbon offset markets have funded the conservation of Maine’s forests and brought more money to Maine landowners, but they are not going to save the planet from climate change, said Ivan Fernandez, a professor at the University of Maine’s School of Forest Resources and Climate Change Institute.

“First and foremost, we need to get off fossil fuels,” Fernandez said. If carbon offsets can “sequester a little carbon as well, that’s good but not going to solve the problem.”

Others say carbon offsets are enabling big polluters to continue business as usual. “They are literally an escape hatch for oil companies and power companies,” said Danny Cullenward, a Stanford Law School energy economist who has studied carbon offset markets.

Cullenward argued that a tax on pollution would be a much more efficient way to reduce carbon emissions, since the revenue raised could be directed to the most deserving and effective climate change mitigation projects.

David Montague, president and CEO of the Downeast Lakes Land Trust, discusses the group’s carbon offset projects. The sale of carbon credits allows the Downeast Lakes Land Trust to conserve additional land, protect wildlife habitat and ensure public access. Credit: Linda Coan O'Kresik / BDN

But carbon offset projects have other benefits beyond removing carbon from the atmosphere, said David Montague, president and CEO of the Downeast Lakes Land Trust. In 2010, his organization began work on one of the first forest projects to sell carbon on the California market.

“If you’re limiting success to only being a measurable difference in greenhouse gases in the atmosphere, the parts per million, then you’re maybe setting yourself up for failure,” said Montague. His organization has used proceeds from selling carbon to buy thousands of acres of Maine forest, protect threatened habitats and ensure public access.

“[Carbon offset buyers] are investing millions of dollars” toward “conservation of land and water resources and wildlife habitat,” he said. “At the end of the day, that is a net benefit to the people of the world.”

Whether the net benefits of offset projects have been accurately measured is a crucial sticking point between proponents and critics.

To deliver true climate benefits, forest carbon offset projects need to capture carbon that is additional to what the forest would have captured without any intervention.

For example, if an offset project saves a section of forest land from being cut down, then all the salvaged carbon captured by those saved trees is considered additional because it wouldn’t exist otherwise.

But proving that a project’s carbon is additional is much more complicated if the land in question is already covered in forest. Doing so requires establishing a baseline of what would have happened in an alternate timeline in which the project isn’t built. It is essentially an attempt to measure an imaginary scenario.

“It’s totally ethereal,” said Mark Trexler, a climate change consultant and longtime carbon market observer who worked on the first carbon offset methodology.

Since there is no agreed upon way to measure carbon being removed from the atmosphere, it’s generally been up to stakeholders and buyers and sellers to make up the rules and how additionality is calculated, Trexler said. There is no federal agency that regulates carbon markets, for example, or ensures they deliver promised benefits.

Handing over the creation of these systems to the people and groups who profit from them has created a “financially conflicted industry that has created the false appearance of an independent, rigorous structure,” said Cullenward of Stanford Law School.

Recent research has pointed to problems with that structure. Eighty-two percent of the carbon purchased from forest offset projects in the U.S. on the California market “likely do not represent true emissions reductions,” according to a 2019 University of California, Berkeley policy brief. The board responsible for overseeing California’s carbon offset market challenged the accuracy of the analysis.

Previous research has found forest offsets on California’s market to be more beneficial. Stanford University researchers wrote in a 2017 study that forest offsets “provide an important opportunity to supply meaningful carbon sequestration,” but they also warned that offsets can “hinder [climate change mitigation] if they distract from necessary emissions reductions overall.”

Owners of forest offset projects in Maine said they are implementing forest management practices that increase the total carbon sequestered in the existing forest. These practices include thinning forests to help larger trees grow and lengthening the time between tree harvests.

Tree growth sequesters carbon from the atmosphere, which helps mitigate climate change. Credit: Linda Coan O'Kresik / BDN

“It’s not about ‘do you cut down or not?’” said Mark Berry, forest program director for The Nature Conservancy in Maine, which in August used proceeds from the sale of forest carbon credits to purchase 9,608 acres in western Maine. “It’s about how much and when. … These offset projects represent a new and serious commitment to maintaining and increasing stock.”

However, not every project represents a large shift in forestry practices. The Passamaquoddy Tribe has sold roughly four million tons of carbon, said Michael-Corey Hinton, an attorney for Portland-based Drummond Woodsum and a member of the tribe. Hinton has represented the tribe and other groups selling carbon offsets.

The sale likely represented more than $40 million in payments from companies that included Chevron and Koch Industries, based on estimates of carbon prices in recent years. (Hinton could not divulge financial details.)

But when asked what forestry practices the tribe had to change to sell carbon offsets, Hinton said “none.”

“It was remarkable,” he said. “No practices have changed and yet the tribe generated and sold about four million offsets.

“We’ve been very fortunate,” Hinton said.