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May 12, 2017





Tribal forest project helps slow climate change, generates revenue
by Edward French


     The Passamaquoddy Tribe is now using most of its land in Maine that it acquired through funding from the 1980 Maine Indian Claims Settlement Act both to slow the rate of climate change and to generate millions in revenue by offsetting emissions from polluters on the other side of the country. The revenue from the sale of carbon offset credits, in turn, will help the tribe grow its businesses, leading to greater tribal self-determination.
     On April 20 the tribe's project was recognized by the Climate Action Reserve, North America's premier carbon offset registry, receiving one of the three Project Developer of the Year Awards for generating the most carbon offset credits in 2016, with 3.2 million credits issued. The award was presented during the Navigating the American Carbon World conference in San Francisco, the largest gathering for discussion about climate change policy and carbon markets in North America.
     Michael-Corey Hinton, an attorney with the Washington, D.C.-based law firm that has represented the Passamaquoddy Joint Tribal Council concerning the project, points out, "The Climate Action Reserve award is significant because it acknowledges that tree growth on Passamaquoddy tribal lands removed more carbon from the atmosphere than any other carbon offset project developed by the Climate Action Reserve in 2016. The award is recognition that the tribe is taking major steps to clean up the air and signals the seriousness with which the tribe has approached its role as a steward of the environment."
     Along with helping address climate change, the project is generating significant revenue for the tribe on an ongoing basis as the carbon credits are sold, with each ton of carbon dioxide removed from the atmosphere counting as a credit. With credits recently selling in the range of $11 to $14, the 3.2 million credits issued to the tribe could be worth between $35 million and $45 million. The tribe recently sold nearly half a million credits, with a percentage of any credits going to project developer Finite Carbon. It is believed that the tribe's project will be awarded 100,000 credits per year for the next 25 years.
     Hinton notes that project revenue has already been put back into tribally‑owned businesses, such as Passamaquoddy Maple and Passamaquoddy Wild Blueberry Co. "This means that a tribally‑owned project is actively supporting the future of other Passamaquoddy‑owned businesses. This is the essence of self‑determination and epitomizes the beauty of the project. Lands associated with these other businesses were carefully considered for the cap‑and‑trade project during consultation with tribal leadership, JTC Forestry and the business managers, and the land management decisions that support the project also support other businesses."
     He explains, "For example, some Passamaquoddy Maple acreage was included in the project C meaning that those sugar maple groves included in the project will be protected for generations to come. This means that the protection of those trees has already generated revenue that's being invested back into the company."
     While the revenue will support tribal business, Hinton cautions that the "revenue potential for this project is not unlimited and is certainly not without strings attached. The tribe has been and must continue to be vigilant with respect to maintaining forest lands, and this will require additional investments in the tribe's capacity to manage its bountiful natural resources."
How the program works
     In 2014 the tribe partnered with forest carbon project developer Finite Carbon to start the first carbon offset project for a tribe with trust land in the eastern United States. The Passamaquoddy Tribe Improved Forest Management Project is a 98,571-acre Improved Forest Management project in Maine developed to the California Compliance Offset Protocol for U.S. Forests under a 100-year agreement. The primarily spruce‑fir and northern hardwoods  forestland supports sustainable timber production and provides for a variety of cultural, recreational and wildlife objectives.
     "The Passamaquoddy Tribe Improved Forest Management Project builds upon our sacred commitment to the protection of our forest resources and creates unique training and employment opportunities for our tribal members," says Ernie Neptune, Passamaquoddy tribal forestry supervisor, in a release. "This project is in line with the sustainable forestry activities that we have practiced since time immemorial but is unique in how it allows forest landowners to benefit from an innovative program designed to curb carbon emissions."
     Under the program, Finite Carbon helps landowners get paid for the carbon that's stored in their trees by selling carbon credits through California's cap-and-trade program. California requires heavily polluting companies to offset their emissions by purchasing carbon permits from the state or carbon offsets from landowners who have been issued credits for verified projects. Carbon sequestration, a process in which the greenhouse gas carbon dioxide is pulled from the atmosphere and stored, can help slow climate change, and forests currently sequester approximately 10% of the U.S. carbon dioxide emissions. The California Air Resources Board (ARB) program issues offset credits to projects throughout the U.S. Finite Carbon, which is based in Pennsylvania, sells the credits for the landowners and gets paid a percentage of the credits it creates. There have been concerns, though, with how California's cap-and-trade program will fare, with both legal challenges and credits not always selling well at the quarterly auctions.      However, the program did win a significant legal battle in the state's court system in April.
     According to the tribe's filings with California ARB, the lands owned by the tribe are located in Washington, Hancock, Penobscot, Somerset and Franklin counties. The area consists of most of the tribe's trust land, excluding portions of Indian Township that may be considered for possible economic development, selected shoreline buffers around lakes that are suitable for future camp leases to tribal members and areas managed by the Passamaquoddy Wild Blueberry Company.
     The portion of the Passamaquoddy project at Indian Township borders two other Finite Carbon forest offset projects, the 19,100-acre Downeast Lakes Land Trust's Farm Cove Community Forest and the 21,800-acre West Grand Lake Community Forest, a joint project of DLLT and the Lyme Timber Company. The Farm Cove project was the first forest carbon project in the nation to receive compliance offsets from California ARB in November 2013.

Approval process outlined
     Passamaquoddy Chief Ralph Dana of Sipayik notes that the project was approved by the Joint Tribal Council in 2014 but then became "somewhat dormant" without the followup required when the joint council was not meeting for a long period of time in 2016. After changes in tribal leadership, in March of this year the joint council agreed to continue with the process that had been started and resolved some final issues with the project.
     Corey Hinton's firm, Akin Gump Strauss Hauer & Feld LLP, has formally represented the Joint Tribal Council with respect to the project since January 2014. Hinton says that the joint council has voted consistently to support the project over the past three and a half years, and numerous public meetings have been held about the project. He believes the project epitomizes the joint council's "pursuit of economic development opportunities that balance long-standing natural resource‑driven policy with a need to create new tribal revenue streams. Put another way, the tribe is largely doing, as a matter of existing policy, what is required to maintain an economically viable cap‑and‑trade project."
     Chief Dana agrees, noting, "We have had a forest management plan for sustainable responsible stewardship of our resources, which will continue. We will continue doing what we're doing now."
     According to Dana, the plan allows for some timber harvesting, as long as it's sustainable and the tribe does not cut more than is grown on the land. Any cutting must be below the natural growth level, and clear-cuts cannot be larger than 40 acres. He also points out that the tribe is not giving up its rights to the land. Tribal members can still hunt and fish, trap and cut wood and gather plants and firewood on the land, along with having camp lots.
     Hinton comments, "The Passamaquoddy people are only here today because of the value that has traditionally been placed on protecting the environment, and that is what this project is about." Noting that the joint council already had conservative tree harvesting policies in place, he says the carbon project complements those goals "by ensuring that lands enrolled in the California cap‑and‑trade program will be maintained and protected under tribal control for the next 100 years. By committing tribal trees to sustainable growth, the JTC is saying that the Passamaquoddy Tribe supports efforts to both lower carbon emissions and clean up the air that all humans breathe."
     Hinton also notes that the tribe is stepping up to this effort at a time when policies to combat climate change are being rolled back at the federal level. He observes, "The Passamaquoddy Tribe is standing with the State of California as part of California's effort to not just recognize the deleterious impact of carbon emissions but to actively remove them by growing trees that remove those harmful elements from Earth's atmosphere."
Concerns raised about project
     But while the program has been generating significant revenue for the tribe and has helped offset carbon emissions by big polluting companies, some tribal members have been critical of it.
     Madonna Soctomah, who formerly was a tribal councillor and a tribal representative to the legislature, recalls that presentations about the issue were made to the Joint Tribal Council by Hinton, but she says, "There was no transparency on that issue. People don't know a whole lot of information about it. Things of that magnitude normally would be discussed and voted on." She says under the Sipayik Constitution tribal officials are to thoroughly vet issues with the people they represent. "There was no vote by Pleasant Point," she notes. Although a non-binding referendum was held at Indian Township, Sipayik did not hold a referendum.
     Soctomah says, "They didn't consult with tribal people about their right. The land is each and every Passamaquoddy people's inherent right. That's the tragedy. We were not consulted. Where have our culture and traditions gone?"
     Another tribal member, Dwayne Tomah, also believes a referendum should have been held. He says "a decision of that magnitude" should have included more involvement with tribal members.
     Chief Dana agrees that before the Joint Tribal Council approved the agreement in 2014 that the council should have held a referendum vote, which would have helped with the process. However, "to hold a referendum after the fact would make things more difficult."
Soctomah also is concerned about the impact on future generations. Of the 100-year agreement for the tribal trust lands, she notes that those tribal lands "are held by the Passamaquoddy people as a whole. They will be responsible, if there's any occurrence not legally carried out, by the California representatives on the ARB board. It's disturbing. Future generations will be liable if anything is not properly documented for the ARB board." She compares the situation with the U.S. national debt, saying the tribe is doing the same "by creating a possible liability for future generations after we're gone."
     As for how the land will be used, she says, "Traditionally, we don't use the land like that. Native people have high reverence for the land. Mother Earth is who we have a connection to. We hold that sacred. Why jeopardize that with our future generations? It's speaking to our culture."
Tomah states, "I'm disappointed in our tribal governments in getting involved with big oil corporations and against traditional ways of thinking. Those are the world's largest polluters, and we're doing business with the world's largest polluters." He says the agreement is in conflict with the traditional values held throughout Indian country. He also is opposed to the restrictions that will be placed on the tribe's lands. "How can we govern ourselves with these restrictions?" he asks. "It shows the power of money and what it's doing to the traditional ways of our people. I want to be a good steward of our environment. We need to protect it."
     But Chief Dana notes that, considering the challenges faced by the tribe, when there are opportunities "where we can develop economic infrastructure and long-term resources for the benefit of the tribe, we need to be doing that."
     He says of the decision to proceed with the carbon offset project, "I really need to put a lot of thought in how does this affect my children and grandchildren and what it means for them." He adds, "I want to do the best job I can looking down the road and make sure we do this right and are very diligent. The long-term vision is important. These projects help get us there."





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