Cash-Strapped Tribes Struggle With Moral Dilemmas of Entering Carbon Markets

The CO2 rush is underway, and it could be the new gold.

Or is this another scheme to seize tribal land and resources, without addressing the root causes of climate change?

Tribal communities in Indian Country could be making millions of dollars selling carbon dioxide credits to offset untapped lands or pristine forests.

For some, carbon dioxide — a key component in climate change — could replace gaming as a key economic force. Others fear tribes are being manipulated to allow continuing destruction of the world’s climate.

It’s a key point of discussion at the United Nation’s Climate Conference, known as COP26, underway now through Nov. 12 in Glasgow, Scotland, where world leaders are working to find ways to halt the rapid changes in climate.

A number of Indigenous activists and organizations will be on hand at COP26 for several days holding informational events and protests at the conference’s public Green Zone to call attention to what they describe as false solutions such as carbon markets to addressing climate change.

“How can we put a price on the air we breathe?” asked Tom Goldtooth, Dine’ and Dakota, executive director of the Indigenous Environmental Network who is attending COP26 in Glasgow.

Goldtooth stated that carbon markets allow industries continue to pollute by paying for reductions or allowances elsewhere.

Bryan Van Stippen is a citizen of Oneida Tribe in Wisconsin and program director. National Indian Carbon CoalitionAccording to, the answer is not so simple.

“Carbon markets are not the final solution but at least they give tribes opportunities to develop additional practices and protect and preserve their natural resources,” Van Stippen said.

The Wild West of emerging carbon markets is clear that tribal lands are of great interest to investors. Tribes not only own large swathes of land capable of sequestering tons CO2, but also companies who partner with them gain additional benefits social corporate responsibility There are many benefits that can be used to improve a climate-friendly image.

And while much about the carbon markets remains uncertain — including rules, regulations and procedures — big business isn’t waiting for the dust to settle. Ecosystem Marketplace, an organization dedicated to forest trends, reports that the carbon market is on track for a $1 billion annual value in 2013.

A recent interview with Indian Country TodayFawn Smart, president of The National Congress of American Indians, and citizen of Quinault Nation compared carbon markets to gambling in terms of financial potential of tribes.

“As with gaming, there is potential for carbon markets to transform Indian Country,” Sharp said.

What are Carbon Markets?

As parties try to complete the remaining pieces of the COP26 agreement, all eyes are now on Glasgow’s COP26 talks. Paris Agreement, An international treaty that was signed by the participating countries at COP21 2015

Article 6, the last provision, addresses rules and frameworks to allow countries to use carbon market to help achieve the agreements goals.

The Paris Agreement required 196 countries or parties to reduce their emissions to keep global warming below 2 degrees Celsius. Preferably below 1.5 degrees Celsius to achieve a climate-neutral world or net-zero by the middle 21st century.

Many countries and companies believe that to achieve net zero pollution, there must be an equal amount of carbon captured elsewhere. This could be through forests or other technological means.

The Article 6 rules are therefore crucial to the plan. While countries could finance carbon-cutting projects in another country to reach their carbon targets, it is necessary to agree on the rules for transparency, accounting, and ways to avoid double-counting.

Although the establishment of a truly international carbon market offers an opportunity to raise funds through transaction fees, the question of who would manage them remains unanswered.

Indigenous and other environmental activists, however, say carbon markets are an example of “green washing,” attempts by polluting industries to use cosmetic changes to cover up the harm they are doing while appearing environmentally responsible.

According to “Hoodwinked in the Hothouse,” The publication was created by the Indigenous Environmental Network, and other organizations. Carbon Markets are a false solution for the climate crisis. They allow industry high levels of carbon dioxide to continue to be produced rather than focusing on reducing the reliance on fossil fuels.

According to Carbon Market Watch, The bottom line is that trading in emission reductions will occur regardless of whether there’s an agreement on Article 6 at COP26. An agreement, however, could impact private sector carbon markets by sending a political signal about what is or isn’t acceptable.

Carbon traders are now hammering at tribal leaders, as tribal governments rush to navigate the new market.

Carbon Markets Competition

Carbon dioxide is produced by animals (including humans) and is absorbed into the atmosphere by plants and oceans. However, since the late 19th Century, burning coal and oil has significantly reduced the amount of CO2 that oceans and plants can remove from the atmosphere. Global warming is caused by excess CO2.

Companies are also looking to carbon trading or markets to offset their CO2 emissions. There are many markets for carbon trading, so carbon credits earned in one market might not be worth in another.

It’s a complicated system, with self-styled compliance and voluntary markets.

Compliance markets, such as California’s Regional Greenhouse Gas Initiative, issue industries a certain allocation of carbon credits for each ton of CO2 emitted annually.

Companies that cannot keep within their credit limits can either buy carbon credits from organizations that sequester or purchase offsets from other companies or acquire them from others in the initiative. This would include tribes that are involved in forestry, agriculture, or any other program that protects tribal lands.

Van Stippen stated that tribes can participate in compliance markets subject to certain restrictions.

“We’ve run across three major issues for tribes entering compliance markets. One, there is a 100-year time commitment to putting lands into a carbon project,” he said. “Two, participation requires a limited waiver of tribal sovereign immunity, and three, tribes may have concerns that since the oil and gas industry are clients, the market allows polluters to continue to pollute.”

Auctions are used for the sale of compliance market credits. These offsets have commodity pricing which means that they are priced according supply and demand. Credits acquired in voluntary markets are generally priced higher than credits purchased in compliance markets.

There are several tribes, such as the Yurok Tribe California’s compliance market allows you to participate. The tribe was awarded the Equator Prize U.N. Development Programme 2018 Climate Mitigation Work.

The tribe dedicated large portions of its forest to carbon sequestration. They have used the profits to support housing and road improvements, and they have also bought back tens or thousands of acres from their traditional territory.

September 2020 78.9 million carbon offset credits were issued to tribes or Alaska Native Corporations for forest projects through California’s program.

Tribes that participate in compliance markets run the risk of being unable to pay their fair share. If a tribe sells carbon credits under a forest project, and the forest burns down, the tribe could be responsible for the credit costs. Although a “buffer pool” of extra land is usually included in the agreements to offset such disasters, critics say the size is seldom enough to cover the losses.

Voluntary markets enable companies to offset their emissions by purchasing carbon credits from projects that reduce the atmospheric CO2.

Buyers can either participate as an individual or as part of a comprehensive industry-wide program. Voluntary markets are not restricted by geographic boundaries and are not restricted to certain industries, unlike compliance markets. The Taskforce on Scaling Voluntary carbon Markets estimates that these markets could be worth $50 billion by 2030.

Even though carbon credits on the voluntary markets are generally priced lower than the compliance markets, they still offer additional benefits such U.N.-related issues. Sustainable Development Goals are those that improve the lives of local people or reduce poverty.

Credits in the voluntary markets may also represent what market insiders call “charismatic value.” Buyers, for instance, may pay a premium to be associated with projects representing Native cultural and/or land restoration.

Tribes need to make a 40-year commitment to a project. They also don’t have to waive sovereign immunity. Van Stippen prefers to cooperate with voluntary markets.

“We work with socially responsible organizations in the purchase of carbon credits rather than selling them through auction methods,” he said. “Tribal councils have some say in who purchases their credits.”

Van Stippen works closely with tribal leaders, staff, and members to ensure that they are fully aware of the complexities and differences in the markets.

“Oftentimes we get into conversations with tribes and they say they aren’t comfortable entering the market at this time,” he said. “I’m fine with that. Now they have the data and maybe sometime in the future they may want to participate.”

As they set their own net zero targets, industries like Apple, Google, Disney, Amazon, and Google are joining the market.

Some voluntary markets are members of private verification organizations like Verra, Gold Standard, or American Carbon Registry. However, voluntary carbon markets are not subject to government regulation at the moment.

However, overall, carbon markets have been criticized Bad accounting, overvaluing carbon credits and offering prices too low to be efficient are all reasons. COP26 will work to establish regulations and methods for verifying carbon credits in the global marketplace.

Making Hard Choices

Carbon markets are attractive to cash-strapped tribes, especially during the COVID era. However, many communities struggle to deal with the moral implications of such deals.

In 2018, citizens of the Menominee Tribe of Wisconsin — which manages its vast forest through Menominee Tribal Enterprises — had a strong emotional response when leaders brought carbon market proposals to the table.

Menominee Forest is often described as the largest tracts in the Great Lakes region of virgin timberland. The tribe’s management, which includes traditional knowledge along with scientific methodology, is seen as an exemplary example of responsibility and sustainability.

In the 1960s the federal government terminated the tribe’s status as a sovereign nation, partially motivated by the belief that the Menominee’s successful forestry and timber operations could support the tribe economically.

The tribe was devastated by the results. However, in a historic, divisive battle they were able to overcome their fears. regain Their federal recognition as a tribe in 1973. Menominee citizens are now very protective about their forest and sovereignty, and will not tolerate any attempt to threaten those assets.

“People had a very emotional response to suggestions that we enter carbon markets,” said Jasmine Neosh, a Menominee citizen. “It got really serious. People were talking about running people out of town.”

Neosh is a former student employee at the College of Menominee Nation’s Sustainable Development Institute. Neosh stated that the college provided background information to the community on climate change and carbon sequestration, and how they are related.

“Since Termination and Restoration, we are like the ultimate fine print readers,” Neosh said. “The more we dug into the details of carbon markets, the less we liked it.”

People were concerned about protecting the tribe’s sovereignty and worried that entering carbon markets would allow polluters to use the tribe as an excuse to keep polluting.

“There was a moral aspect to it,” Neosh said. “Plus, the proposal was like a modern-day version of historic treaty negotiations in which we often didn’t have all the information in front of us when the government offered us money for our land.”

The community decided to opt out of carbon markets and passed. legislation Any further consideration or implementation of any forest-carbon offset or cap and trade program is prohibited.

The reality is that tribes need money.

“I wanted to explore the carbon markets and invited a company to give us a presentation,” said Doug Cox, chairman of the Menominee Tribe. “But people didn’t take time to listen.”

Citizens misinterpreted the presentation as leadership’s commitment to enter carbon markets, according to Cox.

“We wanted to see if the venture might be right for us but membership thought we’d already signed the contracts,” Cox said. “People were afraid of the unknown and afraid that if we got into carbon markets, we would essentially be letting an external entity manage our forest.”

He said that the legislation had put an end to carbon markets entering for now.

“Like any government, we have the right to change legislation,” Cox said. “It could happen in the future.”

Neosh agrees carbon markets are a hot topic.

“I think it’s beneficial for tribes to understand what they are getting themselves into,” she said.

“Gaining a Seat at the Table”

Sharp, a vice president, and former president, of the Quinault Nation envisions carbon markets for tribes as a way to combat the existential threat of climate changes.

Sharp has a long record of fighting against climate change threats to her tribe as well as across Indian Country.

2020. She proposed a carbon tax on Quinault lands businesses. She described it to be a way to hold polluters accountable for generations of exploitation which has led to the forced relocations of tribal citizens in Taholah in Washington.

The Quinault Nation is relocating its tribal operations to higher ground due to rising sea levels and warming temperatures.

The U.S. House Appropriations Committee passed a funding package to offset the relocation costs resulting from climate change in Washington’s Quileute and Quinault villages.

Washington’s April carbon cap-and trade measure, which sets a price on carbon emissions, and includes a 5-cent increase in the gas tax, was passed. Businesses can sell extra credits or buy them from others in Washington’s carbon market. The money would be used to finance projects that include transportation, energy conservation and assistance for the transition to cleaner energy.

Sharp and others lobbied hard and won a mandate in a bill that sets aside 10 percent of carbon revenue for Washington tribes.

According to Sharp’s senior advisor Matthew Randazzo, the legislation is especially noteworthy because 10 percent of Washington’s land base is directly under governance of the state’s 29 federally recognized tribes.

“There’s a huge resource deficit and inequity in how tribal lands and especially how environmental projects are funded,” Randazzo said. “This law is key because it actually mandated equivalent funding dollar-for-dollar for tribal lands across the state.”

Sharp argues that tribes have the right to participate in carbon markets both nationally and internationally as sovereign governments.

“Tribes are gaining a seat at the world’s diplomatic table,” Sharp said. “We’re going to continue to advance a clear agenda for Indian Country.”

Smack Down in Glasgow

At COP26, the hard work of negotiating Article 6’s details is underway. The outcome will have an effect on the carbon markets and tribes in the United States.

“Tribal nations have their own concerns and powers to determine how best to redefine our new green economy,” said Sharp, who is meeting with world leaders in Glasgow at the conference. “We are supporting all of those options and ensuring that the agenda that’s being advanced is inclusive.”

One of the big sticking points is something called “additionality.” Currently, projects forwarded for participation in carbon markets need to show that without funding from carbon credits the projects would harm the ecosystem or land. This concept, according to experts, doesn’t align with the values of tribes. Experts say tribes should have special standing to monetize carbon value from their lands in order to do more to protect them.

Double-counting by countries, such as Brazil, is another concern. Although Brazil’s President Jair Bolsonaro initially promised during his 2018 campaign to allow greater access to the Amazon’s vast forest and resources, downplaying Indigenous rights, he has since promised to eliminate illegal deforestation in two to three years.

Bolsonaro also supports double-counting carbon credits for Brazil’s forests, allowing both Brazil and countries buying offsets to count the credits.

Although the world’s Indigenous peoples represent a high level of charismatic investor power in carbon markets and nature-based solutions, they are among the most vulnerable These lands are most vulnerable to the effects of climate change and have the least amount of political and economic power.

Despite being only 5 percent of the world’s population, they manage 80 percent of the planet’s biodiversity. Parties to the landmark 2015 UN Paris COP21 Agreement, binding member countries together in combating climate change, acknowledge that Indigenous peoples’ knowledge should guide their actions.

But that doesn’t mean officials always listen.

On Nov. 1The United Kingdom, the United States of America, Germany and Norway announced at COP26 they were pledging $1.47 Billion directly to Indigenous peoples in order to reverse forest loss and degrading by 2030.

“We are happy with the financial announcement but we will be watching for concrete measures,” Tuntiak Katan, of Ecuador’s Shuar people, told The Guardian. “The U.K is at a crossroads; they can either use our presence as a photo op or they can choose to become a global champion for Indigenous peoples and local economies.”

Looking ahead

As Article 6 negotiations kick into high gear in Glasgow U.N. leaders face tough questions from the press and non-governmental organizations as well as climate activists.

The Paris Agreement allows countries to use carbon markets to reach their carbon emission goals. Article 6 provides that countries can either use market mechanisms or nonmarket approaches like development aid.

Market mechanisms include the creation a U.N.-governed international carbon marketplace in which credits could come from a renewable power plant, restoration of forests, or other means. Countries could also sell excess through emission cuts to countries that haven’t achieved their goals.

A recent statement, the Environmental Defense Fund, Conservation International, the Nature Conservancy and the International Emissions Trading Association called for “robust, clear guidance” on Article 6 rules. They also demanded rules to prevent double-counting mitigation efforts, comprehensive reporting, and transparency.

Alok Sharma, President at COP26, addressed reporters during a press conference. It was the first day of negotiations for Article 6.

“Should investors be making a profit from solving a problem for which they are partly responsible?” one reporter asked.

Sharma said that private investors and financial services have been making an effort to go green over the past few decades.

“There is a big momentum from the private sector to pursue green growth; this is something we should welcome,” Sharma said.

Sharma also answered questions about the lack a clear method to determine what financing carbon emissions is and what offsets can be used. He stated that the rules would require businesses to include science-based goals.

“This is about working together collectively to ensure that we can reach an agreement,” Sharma said. “There is clear agreement that climate change doesn’t recognize borders; it transcends what I would call normal politics.”

The Associated Press Contributed to this article.