City and county council advised to explore carbon credit options – Indianapolis Business Journal

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Starting next month, a city council and county committee will begin exploring the possibility of selling carbon credits as a way to help fund the preservation and acquisition of green space and parks in Indianapolis.

It’s not a slam-dunk proposition, at least not yet. The carbon market, especially for municipalities, is young and largely unregulated. A dose of caution mixed with optimism is therefore called for. But we welcome efforts to examine carbon credits as a potential financing tool in a market that many expect to grow rapidly.

The concept raises funds by selling carbon credits to companies and other entities that wish to offset their polluting greenhouse gas emissions by investing in forestry carbon reduction projects or related initiatives. This may involve planting trees or simply preserving existing woodlands.

These efforts have been largely focused on tropical rainforests and other large-scale projects. For example, Amazon is paying farmers in Brazil to restore vegetation in the rainforest that bears the company’s name, NBC News recently reported. Additionally, Delta Air Lines is spending $30 million to protect 500,000 acres of Indonesian marshes and a Cambodian wildlife sanctuary.

Slowly, a few cities are also starting to explore the possibilities. As IBJ’s Leslie Bonilla Muñiz reported last week, projects are already underway in and around Seattle, Washington, and Austin, Texas.

In the Seattle area, King County has purchased land to use in a 15-acre pilot project near the town of Sammamish. It produced 3,025 credits and grossed nearly $70,000.

Yields this big wouldn’t be expected in Indiana, because the native trees here aren’t as large and efficient at storing carbon as those in the Pacific Northwest. Yet the demand for carbon credits is expected to grow exponentially. And Councilman John Barth, chair of the environmental sustainability committee, is wisely preparing council to be ready when the time comes.

A study by McKinsey & Company estimates that companies bought carbon credits to offset 95 million tonnes of carbon in 2020, twice as much as in 2017. As more companies commit to reaching net-zero emissions to help stop climate change, demand for carbon credits could grow 15-fold by 2030 and 100-fold by 2050, according to the Global Voluntary Markets Scaling Task Force carbon. By 2030, the carbon market could be worth $50 billion.

The City-County Council’s exploration of the concept is largely aided by local environmental groups such as Keep Indianapolis Beautiful, Carbon Neutral Indiana and Indiana Forest Alliance.

Now would also seem like a great time to engage Indianapolis-area businesses considering a net-zero commitment to see if any of them would be willing to buy carbon credits from the city.

Such a partnership would help local businesses meet their environmental goals and help the city add much-needed green space while providing the funding needed to preserve and properly maintain existing parks.

As the very effective business philosopher Stephen Covey said: Think win-win.•

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