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Carbon credits FAQs
What are carbon credits?
Companies that produce carbon emissions can offset this negative impact to the environment by purchasing carbon credits from entities that reduce carbon dioxide and other greenhouse gases. One carbon credit equals 1 metric ton of carbon dioxide emission. In this case, state forests absorb carbon as trees grow, locking it into wood and forest products manufactured from harvesting trees. Carbon offset credits represent measured and modeled carbon maintained in the growing state forest and durable wood products such as lumber.
How do carbon projects help Michigan achieve climate and environmental goals?
- The sale of carbon credits is one strategy that will help Michigan along the path to reach carbon neutrality by 2050. Michigan is the ninth state in the nation to make a commitment to 100% economic carbon neutrality.
- This project will help advance Michigan’s commitment to action as part of the U.S. Climate Alliance.
- Will help meet United Nations Sustainable Development Goals related to clean water, economic growth, sustainable communities, responsible production and consumption, climate action and others. The UN Framework Convention on Climate Change is the primary international, intergovernmental forum for negotiating global responses to climate change.
What methodology and registry are being used for the project?
The DNR is using the American Carbon Registry's Improved Forest Management Methodology for non-federal U.S. forestlands. Carbon offset credits from the projects are registered with the ACR. The ACR is a nonprofit enterprise of Winrock International, founded in 1996 as the world's first private, voluntary greenhouse gas registry.
Who is Anew Climate?
Anew Climate, formerly Bluesource, is the contracted developer of DNR carbon projects. Anew is a climate action partner that has pioneered creative climate solutions since 2001. With deep expertise across environmental technologies and markets and hundreds of projects in the United States and Canada, Anew is a leader in voluntary, compliance and pre-compliance carbon markets.
What are funds from carbon credit purchases used for?
Funds from the sale of carbon credits are re-invested into the Forest Development Fund and Game and Fish Fund, which supports DNR climate change adaptation and mitigation efforts.
Are there other environmental or social benefits to this project?
This project will help the DNR to adapt to climate-related requirements in forest management standards for forest certification, to which the DNR must use for the sustainable management of state forest lands.
Sustainably managed forests provide a variety of benefits to people and nature including clean air and water, wildlife habitat, scenic places for recreation, renewable forest products and carbon storage.
How will this project affect state forest timber harvests and management?
Management of state forest resources and the sale of carbon credits are intended to be complementary. Commercial timber harvest for forest growth and wildlife habitat objectives are specifically compatible with forest carbon projects. Carbon credits can be generated from the management of state forest resources as governed by approved DNR forest management plans. It is not anticipated that the carbon projects will appreciably affect management and timber harvests levels from the forest. Any changes in management will be driven by any future changes to DNR forest management plans, which are updated every 10-years and are subject to public review prior to adaptation.
What happens if there is a natural disaster in a project area?
Landowners participating in carbon offset projects are not liable to repay offset credits if there is an unintentional, natural loss of forest carbon stocks, such as the effects from a fire, storm, disease or insect damage, in an ACR-registered carbon project. The ACR Improved Forest Management methodology requires that a risk-based proportion of the total carbon credits generated by registered projects be allocated to a communal 'buffer pool' (like a group insurance policy) that projects can draw from in the event of a natural loss of forestland for any project. The DNR would not have to pay back the money received from the project.
Who is purchasing carbon offset credits from the project?
DTE Energy announced a commitment to purchase offset credits generated from the first 10 years of the Big Wild project. DTE Energy will offer these offsets to its larger industrial natural gas clients seeking to reduce the impact of carbon emissions, much as they do for their residential and small business customers, through DTE's voluntary Natural Gas Balance program. The DNR plans to partner with carbon buyers that are implementing meaningful measures to reduce their carbon footprint.