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Michigan set to sell first carbon credits from state land

The Pigeon River Country is the largest contiguous tract of forest in lower Michigan.
Patrick Shea
Interlochen Public Radio
The Pigeon River Country is the largest contiguous tract of forest in lower Michigan. (Patrick Shea.)

Michigan is home to nearly 4 million acres of state-owned forests – more than anywhere else in the country. That land is critical to the state’s forest product industry, and also generates revenue through tourism, hunting and fishing.

But now, these trees will be at the center of a new industry: forest carbon markets.

These markets are on the rise all over the planet. And the process that drives them is something you probably learned in grade school: photosynthesis.

Trees absorb carbon dioxide and water, and use sunlight to convert it to food.

“So at the very base of it trees are giant carbon sucking machines, or giant carbon sucking organisms,” said Josh Strauss, vice president of natural climate solutions for Anew – one of the top developers of carbon credit projects in North America.

Threes store the carbon in their wood material, and exhale oxygen.

Carbon dioxide – or CO2 – is the main greenhouse gas contributing to climate change, and forests in the United States capture up to 15 percent of our yearly carbon emissions. But that carbon will only stay there as long as the trees do.

“When you cut down a tree, all that carbon that’s been built up over time will be released into the atmosphere as that material degrades,” Strauss said. “So all we’re trying to do is encourage more tree growth and discourage removal of these trees, or the degradation of the wood material.”

Strauss says the way to do that is to monetize the carbon inside that wood.


One carbon credit represents a metric ton of carbon stored in trees. That’s about the amount of CO2 released by driving from Detroit to San Francisco. Carbon credits give landowners a way to make money by not cutting down their trees. And it gives companies a chance to offset some of their emissions by buying those credits.

Anew has helped set up the first ever carbon credit project based in a state-owned forest. That forest is one of northern Michigan’s most iconic natural areas.

Pigeon River Country is home to Michigan's elk herd. It's now the site of the first-ever carbon credit project on state land.
Michigan Department of Natural Resources
Pigeon River Country is home to Michigan's elk herd. It's now the site of the first-ever carbon credit project on state land. (Michigan DNR.)

Pigeon River Country is lower Michigan’s largest contiguous tract of undeveloped land. It’s home to Michigan’s only elk herd, and is a popular destination for hunters, hikers, bikers and all sorts of outdoor enthusiasts.

It also supplies timber for the state’s $20 billion dollar forest product industry, which employs 96,000 Michiganders. Some 20 percent of the wood used in that industry comes from state forests.

When the Department of Natural Resources is getting ready for a timber sale, employees do what’s called a timber cruise.

“You go out and you take plots, and you'll measure the amount of trees within that plot and how big the trees are,” said Mark Monroe, Unit Manager of Pigeon River Country for the Department of Natural Resources.

“Then we can take those numbers and do estimates on what the value is, and that’s the advertised price we would put it up for,” Monroe said.

Timber harvests on state forest land supply 20 percent of Michigan's forest products industry.
Patrick Shea
Interlochen Public Radio
Timber harvests on state forest land supply 20 percent of Michigan's forest products industry. (Patrick Shea.)

Recently, foresters have been out here taking those same kinds of measurements. Not to determine the dollar value of timber, but of carbon.

It can take about 18 months to generate and verify carbon credits, said Scott Whitcomb, senior adviser of wildlife and public lands for the DNR.

“A lot of other states have studied this or they've commissioned research to say ‘should we, shouldn’t we?’ We just kind of dove into the shallow end of the pool and said well let’s see what happens,” Whitcomb said. “And now we’re ready to actually issue the first slate of credits.”


The first customer to buy these credits from Pigeon River Country will be DTE – an energy company based in Detroit.

“A customer can offset the average emissions of a residential home from 25 percent up to a hundred percent,” said H.J. Decker, director of sales and marketing for DTE gas.

The utility now offers their 1.3 million customers an option to pay extra on their natural gas bill. On a gas bill that looks like an extra $4 to $16 each month — relatively modest in the grand scheme of things, according to Decker.

DTE will use those funds to purchase carbon credits from Anew, the company we heard from earlier. Anew takes a cut, and a majority of the proceeds go to the landowner: the DNR.

This new program could help Michigan reach its goal of net carbon neutrality by 2050 (a goal DTE says it shares) while also providing funding for public lands.

“We consider that a reinvestment in the resources that generated the credits to begin with,” said Whitcomb, with the DNR. “Which is not unlike what we’re doing with forest products, where the money goes back into perpetuating the forests and keeping them healthy.”


The project seems like a win-win for the climate, the forest and all parties involved. But plenty of experts are wary of these sorts of carbon offset markets. Among them is Jennifer Skene, natural climate solutions policy manager with the Natural Resources Defense Council.

“The offset system has really become quite a boon for companies, for the oil and gas sector,” Skene said, “enabling them to claim certain progress when in fact very little is actually happening on the ground.”

Like many environmentalists, Skene said forest carbon shouldn’t count as an offset if it was going to be there anyway.

“One of the key concerns is are you actually addressing emissions that would truly have happened?” said Skene.

Meaning, were those trees really going to be cut down in the first place?

The DNR’s new project, specifically, has been criticized for this. An article published by Bloomberg last spring pointed out that the average volume of timber harvested in Pigeon River Country has been about the same since 2005. There are no plans to change that.

But Scott Whitcomb with the DNR said those critiques are short-sighted.

“If you’re driving around the forest, are you going to see anything that you would see as different? Probably not,” Whitcomb said. “But there is a difference.”

It’s true there hasn't been a major uptick in logging within the past few decades. But in the forestry world, that’s not a long time.

“The forests that we have today are a product of the forests that the department inherited in the 1920s,” Whitcomb said. “It was all cut at one time, and then it's not available for harvest because the trees are growing.”

Then, it once again becomes available to cut down.

“And you sort of ride this roller coaster of boom and bust,.” he said.

Whitcomb says it can be 80 years - or more - before some stands of state-owned timber are ready for harvest.

“So when the critics point to say, ‘Well this was never going to be harvested at all to begin with,’ that's not necessarily true,” he said. “Legally, we can harvest more than we do. And what this does is takes that legal option off the table.”

There are others still who are skeptical of the whole concept. Jason Hayes is with the Mackinac Center for Public Policy, a think tank that advocates for free markets and limited government.

“The first question to answer is, do you really need to reduce those emissions? My answer would be no,” said Hayes.

Hayes said he doubts the severity of climate change, and the threats it poses. That’s despite the vast scientific consensus that a global warming above 1.5 degrees celsius will greatly exacerbate flooding, wildfires, world hunger, conflict and more.

But even Hayes, who disagrees with the very premise of the DNR’s carbon credits, still sees a benefit. He points out that carbon credits could be another source of revenue for habitat management — something that’s important to Hayes as a hunter and fisher.

“One of the key ways that they manage wildlife habitat, fisheries, those sorts of things is through the sale of hunting licenses,” Hayes said.

According to the DNR, there are about a third fewer hunters there were 20 years ago. And that means less money from hunting licenses.

“And If it’s not coming from the sale of hunting licenses and fishing licenses, okay, let’s go out and find another way to do it,” he said. “And I think this is one way,” said Hayes.

It might take some time for the DNR to work out the kinks of this new program, and to really know how much of a climate benefit it has.

In the meantime, a forest belonging to the people of Michigan will have a dollar value just for being there.

Patrick Shea was a natural resources reporter at Interlochen Public Radio. Before joining IPR, he worked a variety of jobs in conservation, forestry, prescribed fire and trail work. He earned a degree in natural resources from Northland College in Ashland, Wisconsin, and his interest in reporting grew as he studied environmental journalism at the University of Montana's graduate school.