A new NH law will investigate the impact of carbon offset sites on tax revenue
Published: 07-30-2024 2:15 PM |
When you buy a plane ticket online, have you ever paid a few extra dollars to make up for your flight’s carbon footprint? That’s a carbon offset: a program that aims to counteract the environmental impact of a purchase.
This is often done by protecting or planting trees, which can store carbon and keep it out of the atmosphere.
While carbon offset offerings have grown increasingly popular as consumers become more concerned with climate change, few of us have actually considered where all this offset carbon is being stored. But in New Hampshire, it may be just outside your window.
Around four-fifths of the state is forested, making it attractive option for this nascent industry. But many local political and forestry leaders, especially in the North Country, are skeptical of these programs because of how they might limit timber production and disrupt forest-centered tourism.
Last week, Gov. Chris Sununu signed the state’s first law pertaining to these programs,which will fund a Department of Revenue Administration study on the potential lost timber tax revenue and require the Division of Forestry to create a registry of all carbon offset sites in the state. It was introduced in the state House of Representatives by the entire Coos County delegation.
“Our goal is not to stop anybody from selling carbon,” said Rep. Mike Ouellet, a Colebrook Republican. “Our goal is to keep the lands’ traditional uses and at the same time preserve our culture and our way of life in the North Country.”
The 2022 purchase of the Connecticut Lakes Headwater Working Forest — a vast tract of land in Pittsburg that makes up 3% of the state’s total forestland — by a North Carolina-based carbon offset company has stirred controversy in the remote North Countrybecause it has already curbed logging.
In April, the Department of Natural and Cultural Resources rejected the company’s stewardship proposal for the 146,000 acre parcel because of the potential negative impact on the timber industry. The company is currently revising its proposal to better adhere to the land’s conservation easement — which was written to ensure the forest remains a working timberland.
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Rep. Henry Noel, a Berlin Republican, said the timber industry plays a large role in the county’s economy. He said discussion around the Connecticut Lakes Headwater Working Forest spurred local leaders to take action.
“The impact of limiting the amount of timber that can be harvested from such a large tract of land would have the immediate impact of endangering the livelihood of the people who cut the wood,” he said.
Ouellet said a local timber company has already had to start trucking in timber from New York and Pennsylvania that it once got from Connecticut Lakes Headwater Working Forest. This disruption in the supply chain is raising costs among local industries that rely on wood products, like construction.
“It’s got a waterfall effect,” he said.
In New Hampshire, a 10% tax is levied on the stumpage value of timber harvested. In 2023, Pittsburg earned $175,000 from the timber tax, which constituted a sizable slice of its $2 million annual budget. Democratic Rep. Corinne Cascadden said the sparsely populated town relies on this income to function.
“They don't have the population that would glean property tax revenues like a lot of other areas,” she said.
The new law will look into how municipalities will be impacted if carbon offset sites lead to reduced revenue from the timber tax. Ouellet said the study will evaluate if a new tax should be placed on carbon offset sites to replace the timber tax.
“Because in essence, [carbon offset companies are] selling the timber even though it's not being cut,” he said.
The law stipulates that the Department of Revenue Administration submit a final report summarizing its findings and any recommended action to the legislature by Nov. 1, 2025.
Part of the anxiety over the growing carbon offset industry is that it could allow out of state companies to buy up large tracts of land, extracting money from the local economy without Granite Staters feeling an economic boost. Ouellet said he hopes the creation of a registry will help identify “who the players are” in the industry.
He added that not only do these offset sites threaten local timber harvesting but also hunting, fishing, ATVing and snowmobiling. He said there is concern an out-of-state property owner could restrict these activities in favor of carbon offsetting.
“The North Country economy has turned into a tourist based economy,” he said.
Charles Levesque, founder of the forestry consulting group Innovative Natural Resource Solutions, sits on the Connecticut Lakes Headwater Working Forest’s citizens committee. He said the logging and carbon industries do not need to be at odds. In fact, he said the previous owner of the Connecticut Lakes Headwater Working Forest also used part of the land for carbon offsets.
“It's just that this new company that's come in has just gone way too far and done things not consistent with the conservation easement,” he said.
Recent research questions the efficiency of carbon offsetting as a climate change mitigation tool. In May, the federal government announced guidelines for high quality carbon offsets.
These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.