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It’s an idea so simple that it sounds almost too good to be true: Tribes across the country are using their forest lands to generate income by selling carbon credits in the California emissions trading industry while preserving their lands for future generations.

“These type of projects focus on preservation of tribal natural resources while still being able to derive revenue,” says Bryan Van Stippen, a member of the Oneida Nation of Wisconsin and program director for the National Indian Carbon Coalition, “even if a tribal entity has a commercial logging operation.”

California, which has the fifth largest economy in the world, launched its “cap and trade” program in 2013 with the goal of reducing greenhouse emissions to pre-1990 levels by 80 percent by 2050. Currently, 11 tribes from Alaska to Maine have received approval to participate in the program.

Based on the European Union Emissions Trading System that was enacted in 2005 to fight global warming, the carbon trading industry in North America is a market-based system designed to reduce pollution in the atmosphere by “capping” (or limiting) the harmful emissions of fuel companies and other big polluters that emit 25,000 tons of carbon dioxide per year or more. These companies can then buy carbon off-set credits from tribes and other entities to help meet their required goals.

According to the California Air Resource Board, carbon offset credits are sold at the state’s quarterly cap-and-trade auctions. Each offset is equal to one metric ton of carbon dioxide and sells for approximately $11 to $14 per credit, depending on market rates. The Passamaquoddy Tribe of Maine, for example, used nearly 100,000 acres of their forest lands to generate 3.2 million credits―which have been valued at between $35 and $45 million that they used to invest in other business projects.

Currently, there are two markets in the carbon credit industry: The compliant markets in California and the Canadian provinces of Quebec and Ontario, which have joined together to allow businesses to buy credits issued within those jurisdictions; and a voluntary market which is used by companies, individuals and governments purchasing carbon offsets.

The compliant markets have certain restrictions and requirements for tribes—including a 100-year commitment and a limited waiver of sovereign immunity―that have dissuaded many tribes from participating in the program due to concerns over how their needs may change over time and what that may mean in regards to control over their lands.

Troy Eid (gtlaw.com)

Troy Eid, who is the co-chairman of the American Indian law practice group at Greenberg Traurig LLC in Denver, Colorado, worked with a tribe to secure a carbon credit agreement with a major corporation through the California carbon trading market. He says that there were many concerns that came up as the tribe considered its options.

“There were many passionate arguments regarding the ‘hundred year’ clause,” says Eid. “Granting a limited waiver of the tribe’s sovereign immunity for a century—binding several future generations—was a consideration.”

Moreover, says Eid, there were those who believed that there was no way to anticipate how the tribe’s needs would evolve in the forseeable future in regards to how they would use their lands.

“They might grow and need to develop it for housing, for example, or they might want to do other things with it,” he says. “Ultimately, however, they decided to use a portion of their lands for conservation and income from the carbon credit markets.”

With many tribes leery of committing to restrictive agreements that they feel may impede their sovereignty, however, groups like the National Indian Carbon Coalition are working to find alternative solutions.

“We are trying to develop projects working within the voluntary market because it does not require as many restrictions as compared to the compliant market,” says Van Stippen. “Timeframes on the voluntary market usually run no longer than 40 years but can be even shorter and would not require a limited waiver of sovereign immunity.”

Considering the deleterious effects of the extractive industries on tribal communities and their people in the last 150 years, however, the notion of selling carbon credits to preserve their lands instead of drilling, deforestation, pipelines and mining has had a growing appeal for tribes whose values and priorities align with environmental conservation.

“Carbon sequestration projects on tribal lands focus on sustainable land management practices that avoid the exploitation or extraction of natural resources,” says Van Stippen. “We at the NICC are committed to working with tribal nations to provide resources and support to ensure the preservation of their lands while reducing the effects of climate change and generating a sustainable income for generations to come.”

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