Taxing tourists: a carbon offset project that is actually working

This story was originally published by Grinding and appears here as part of the Climatic desk collaboration.

When Kira Roberts moved to Juneau, Alaska, last summer, she immediately noticed how the city of 31,000 changes when cruise ships dock each morning. Thousands of people arrive and disappear at nightfall. As the season draws to a close in the fall, the parade of buses that roll through her neighborhood slows down and the trails near her home and the vast Mendenhall Glacier are no longer packed with tourists.

“That unique rhythm of Juneau really catches my attention,” he said. “It’s kind of crazy to think that all of this is a mile from my house.”

But Mendenhall is shrinking rapidly: the 21-kilometre-long glacier has receded about a mile in the last 40 years. To get all those tourists to Juneau (about 1.5 million this summer on cruise ships alone) it is necessary to burn the very thing that contributes to their retreat: fossil fuels.

In an effort to mitigate some of that CO2, some of those who go whale watching or visit the glacier are asked to pay a few dollars to offset their emissions. The money goes to the Alaska Carbon Reduction Fund, but instead of buying credits from some distant (and questionable) compensation projectthe nonprofit spends that money installing heat pumps, targeting residents like Roberts who rely on oil heating systems.

Heat pumps are “a no-brainer” in Juneau mild winters (for Alaska)said Andy Romanoff, who manages the fund. Juneau’s grid relies on emissions-free hydroelectric power, so electricity is cheaper and less polluting than the heat of the oil. They too save residents money — Roberts said he paid about $500 a month for heating oil and his electric bill had increased only $30.

“The financial difference is enormous,” he said.

Programs from Monterey, California, to Lancaster, Pennsylvania, have attempted to use similar models to fund local renewable energy or energy efficiency projects, and carbon offsets for flights and other activities are nothing new. But most of the voluntary market for such things is led by large companies supporting far-flung projects. The fund in Juneau is eager to capitalize on the enormous tourist interest in its backyard.

The program, which until recently was called the Juneau Carbon Offset Fund, began in 2019 when members of the advocacy organization Renewable Juneau were discussing how to help Juneau achieve its goal of having renewable energy provide 80 percent of the city’s energy needs by 2045. The organization’s existing heat pump programs were reaching only the “low-hanging fruit,” Romanoff said: people who had money and were ready to switch just for climate reasons. He envisioned the fund as a way to get the devices (and the fossil fuel reductions they provide) to more residents.

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About 1.5 million tourists came to Juneau aboard cruise ships this summer. Many of them visited the Mendenhall Glacier, which has retreated about a mile in the past 40 years due to climate change. Photo by Getty Images/Grist

Romanoff, who is also executive director of the nonprofit Alaska Heat Smart, is aware of the hit carbon offsets have taken on his reputation lately, but believes the fund’s focus on heat pumps and local work provides transparency and accountability. “It’s a cost of carbon that people could really relate to and understand,” he said.

Many voluntary offset projects overestimate the emissions they are avoiding, sometimes by as much as five or 10 times, said Barbara Haya, director of the Berkeley Carbon Trading Project. “Project developers are making methodological decisions that give them more credits rather than less,” she said, and those who verify claims do not apply conservative estimates when there is uncertainty.

The Alaska Carbon Reduction Fund uses three years of utility bills to determine how much oil a recipient burned before purchasing a heat pump. It has paid for 41 installations since 2019, at an average cost of $7,000, and estimates the devices will avoid 3,125 metric tons of carbon emissions over their 15-year lifespan. Those calculationsplus a subsidy from non-tourism donations, raise the carbon price to $46 per ton.

This is more expensive than many voluntary loans, but in line with what Haya said, they are higher quality projects. “That seems to be the cost of real mitigation,” she said. A more fundamental issue is proving that any offset project would not have been done on its own, Haya said.

Romanoff believes his project meets that condition because the heat pumps go to residents who earn less than 80 percent of the local median income. One of the first beneficiaries, Garri Constantine, lived down the street when his system was installed. In the three years since then, Constantine has become a technology evangelist, in part because he no longer spends $300 a month on firewood, trading it for a $50 monthly increase on his electric bill.

“I just don’t understand why these things haven’t taken off like wildfire,” he said.

Although the fund has money for future facilities, Romanoff said the speed at which it can operate is limited by a shortage of installers nationwide. Most of its donations came from the nearby gold mine and Juneau guiding company Above and Beyond Alaska, but Allen Marine, a regional tour operator, began offering the fund to passengers this summer and is now offering a voluntary donation when booking online. The company viewed the fund as an opportunity to “give back to the communities in which we operate,” said Travis Mingo, vice president of operations. As part of the partnership, the carbon reduction fund agreed to begin funding heat pumps in other Allen Marine destinations, such as Ketchikan and Sitka.

A much smaller company, Wild Coast Excursions, includes compensation in its prices. When owner Peter Nave’s plan to run summer tours at the local ski mountain fell through, he switched to bear watching and alpine hiking, some of which are far enough away to require helicopter rides. Climate change is especially visible to Nave, a Juneau native who has seen the dramatic changes at Mendenhall up close and has worked as an avalanche forecaster. He is covering 125 percent of the climate impact of those excursions, labeling his company “carbon negative.” He estimates that he will end up making up about one percent of the price of each tour. In his view, it’s simply the cost of doing business.

“I kind of rationalized that if I could offset more than we would use, then I might feel a little better about taking on [the helicopter] strategy,” he stated.

He’s skeptical of compensation in general, but the tangibility of this program made a difference. “I could see the reduction because I know heat pumps work, my friends have them, people I know install them,” he said.

However, Wild Coast Excursions’ contribution to the carbon reduction fund in the first year is unlikely to cover even one heat pump. Including cruise ships either major airlines in the program would make a much more significant dent in Juneau emissions. Romanoff said his organization had an initial conversation with a local representative of a major cruise company, but was told he would not participate if the fund only benefits Juneau and the compensation was not verified by a third party.

The Alaska Carbon Reduction Fund began pursuing verification with Verra, the world’s largest voluntary credit certifier by volume, but dropped out due to cost and inconvenience. about negative press coverage. “With that money we could install five or six heat pumps,” Romanoff said.

Offsets are a tool that cruise companies consider on a “case-by-case basis” to meet their own emissions goals, said Lanie Downs, spokeswoman for the Alaska Cruise Lines International Association.

Carnival Plc, which owns three cruise companies operating in Alaska, said it will consider carbon offsets only if energy efficiency options have been exhausted. The other two major cruise lines that regularly dock in Juneau did not respond to requests for comment, but they do list offset purchases in their annual sustainability reports.

While the city charges cruise lines a fee per passenger, that revenue can only be used for specific projects in the port area. Alexandra Pierce, Juneau’s tourism manager, said the city has “never formally proposed any emissions fees” on cruise ships, but noted the industry’s involvement in efforts to reduce cruise line emissions and install electric power. on land, the marine equivalent of stopping idling emissions.

Allen Marine has “initiated discussions” about including a compensation fee on its tours sold through cruise lines. “As we move forward with contract renewals, the amount of money we will be able to receive for this program will start to have a snowball effect,” Mingo said. But ultimately that leaves most of the emissions from tourists (cruise ships) unaccounted for.

Romanoff receives a few emails a year from people in other parts of Alaska and the lower 48 states interested in setting up their own compensation funds. He believes his organization’s model could be replicated in places with many oil heating systems to replace. That said, a carbon price based on replacing gas heating could be too expensive for most people, he said.

But in the Alaska area, he believes a “surge” of support from small businesses could make the difference in getting cruise lines on board. “Once we build that arsenal to a certain size, I think that will speak very loud and clear,” he said.

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