Gov. Mike Dunleavy, who has made a political career out of promising more than the state can afford while never supporting taxes to pay the bills, has a new, almost magical plan to help cover his budget deficits.
It’s all about collecting so much money for essentially doing nothing that the state could continue avoiding taxes, continue paying the fattest Permanent Fund dividends in history, and continue avoiding an honest long-term fiscal plan to pay for public services.
It sounds like a politically induced mirage.
The plan? Promise never to log trees that probably never were going to get logged anyway and collecting gobs of money from investors and companies willing to pay to keep carbon safely stored in the trees instead of escaping into the atmosphere.
And collecting even larger gobs of money — “gobs” being a technical financial term for hundreds of millions of dollars a year — for storing global-warming carbon dioxide deep underground in depleted oil and gas reservoirs around Cook Inlet.
All this from a governor who has never publicly acknowledged the main culprit at the scene of the climate-change crime: Emissions, particularly from burning fossil fuels.
In a news interview describing his plan, Dunleavy indicated the state needs the money and that there are “a lot of people” who believe that carbon emissions are driving global warming. “Alaska is here to help them.” Gives you a warm feeling to know we are standing ready to profit while coastal communities await the next flood.
Though he has yet to release any details of the get-rich scheme, the concept is that the state could earn money by leasing depleted oil and gas reservoirs to companies to store carbon dioxide from refineries, power plans and other polluters — called carbon sequestration and storage. Companies could use or sell those do-gooder credits to offset their own emissions or to meet regulatory standards. Or investors could trade in the carbon credits.
And, for every ton of carbon stored, the federal government hands out a lucrative tax credit.
Same thing for trees on state forest land. Promise never ever to log the timber and someone will pay the state for the carbon credits.
The trade in carbon credits is growing, as investors and businesses worldwide see them as a readily available, cost-efficient way to clean up their act to please customers, shareholders and climate activists.
But as the credits are gaining in popularity, they also are attracting skepticism: Is the profit motive really the way to reduce global-warming greenhouse gas emissions? Is it honest to pay to “protect” forests that never were truly endangered? Can the geology and economics of carbon sequestration underground really work? Is this merely a government-subsidized scheme, a green version of the crypto bandwagon that sounds too good to be true?
The governor is eager to go out on a limb on carbon storage because it saves him from honestly dealing with the state’s long-term budget deficit. The lure of easy money is an attractive stick to fend off detractors who have long complained Dunleavy lacks a fiscal plan.
While I acknowledge there could be something in time to the governor’s plan, it’s unproven and extremely unlikely this decade to generate for the state treasury the hundreds of millions of dollars a year he claims. It’s premature to start counting the revenues in the state budget, as the governor does on his spreadsheets.
Carbon dioxide in the atmosphere is bad for the planet and its people. Telling Alaskans that the state can get rich off the problem is a sooty idea.
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