Two conservation groups are cashing in on Afognak Island timber, but they’re not using a saw to do it.

The Rocky Mountain Elk Foundation and the American Land Conservancy have partnered with London-based CAMCO Global to market what they’re calling the Afognak Forest Carbon Project, producing carbon credits for global markets.

It’s a way for the groups to make money without cutting down trees, and it’s the first time it’s been done in Alaska.

“This is the first forest carbon project in Alaska,” said Tim Richardson, a consultant who has worked on the project in various capacities for more than a decade. “(Afognak) was a precedent-setting forest when Harrison was president (in 1892) and now it is again.”

Carbon credits are a relatively new phenomenon, a kind of stock certificate that allows factories to cancel the carbon dioxide they emit by investing in projects — like forests — that either absorb carbon or reduce the amount emitted into the atmosphere.

Credits are awarded only for new efforts, forests protected from logging — as on Afognak Island — or new technologies that scrub carbon from a smokestack’s emissions.

Carbon credits gained national attention in 2010 when Congress defeated a bill that would have created a national carbon cap-and-trade system. The bill would have set limits on how much carbon a business could emit. Go over that limit, and the business would have to buy credits canceling that overage.

The system was envisioned as a way to penalize offenders while rewarding those who go above and beyond the limit in reducing pollution.

While cap-and-trade was defeated on a national level, California will implement a statewide system on Jan. 1. The Canadian province of Quebec will follow soon after.

“We may be on the forefront of rising demand,” Richardson said.

The Afognak project covers 8,200 acres near Perenosa Bay on the north side of Afognak and is expected to absorb 1.2 million tons of creditable carbon over the next 30 years.

At the going market rate of $6 per ton, those 1.2 million tons of credits are worth $7.6 million.

What’s more, neither the Elk Foundation nor the Land Conservancy own the project’s land — the state of Alaska does.

In a series of transactions, the Elk Foundation and Land Conservancy bought the land from an Afognak Native Corporation joint venture, then turned it over to the state of Alaska. While the surface rights went to the state, the two groups kept the rights to the property’s carbon credits.

“Think of it like a bundle of sticks,” said Mike Vitt, a Vancouver forester who coordinated the process. “You can pull the sticks apart.”

The idea of splitting land rights isn’t a new one in Alaska, where Native corporations occasionally split surface and subsurface rights on one piece of property. What is new is that for the first time, people are making money from the land while leaving it untouched.

“What’s really cool for us is that in the past, you had basically two choices: You could keep it standing or you could cut it down and make money off it,” Vitt said. “Essentially, we can make the same money while keeping the trees standing. As a forester, that’s what’s really exciting for us.”

While the project shows promise, there are hurdles. At market rates, the price of credits generated from the Afognak land do not equal the $9 million purchase price of the land.

Moreover, the market for carbon credits is still speculative. Carbon markets around the world use different standards, and while credits from the Afognak project can now be purchased by companies voluntarily seeking credits, the project would have to go through another round of review to be certified for the California or Quebec mandatory markets.

Supply has vastly exceeded demand in the voluntary markets. Of 95 million tons of carbon credits available on one leading market last year, only 13.6 million tons were bought.

“I think we’ve always had a little bit of trepidation as to whether it will really work. We still have that today,” said Blake Henning, vice president of lands and conservation for the Elk Foundation.

To date, more than $1 million has been spent processing the paperwork and performing the studies needed to set up the project. CAMCO Global, which is marketing the credits on different markets for the Elk Foundation and Land Conservancy, will take 30 percent of the proceeds, leaving 35 percent of an uncertain pie for each group.

Regardless of how much money the Elk Foundation earns, Henning said, the group’s main mission has been accomplished. Another portion of Afognak Island has been opened to elk hunters, and more habitat has been protected. “If we got some of the carbon sold, that would be gravy,” he said.

In 1892, President Benjamin Harrison proclaimed the Afognak Forest and Fish Culture Reserve, one of America’s first conservation areas. Now, 120 years later, the island is again a pioneer in conservation.

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