The Minneapolis Park Board is about to expand a program that generates funding for trees by selling carbon offset credits to private companies that want to claim they are “offsetting” their greenhouse gas emissions without reducing them.
The offset program partnership with local nonprofit Green Cities Accord provides a much-needed revenue stream for the Park Board, and the board is expected to approve it Wednesday. But that vote is likely to override the concerns of a minority of commissioners, who say the system amounts to ‘greenwashing’ – allowing companies to say they are environmentally friendly but actually giving them the opportunity to fall short of carbon reduction targets to do.
“I would love to explore other avenues that don’t actually give other people a way to ease their guilty conscience and a license to pollute,” said Commissioner Becky Alper.
Other commissioners say the Park Board is in a budget crisis and must be prepared to be creative.
“We exist in a capitalist structure that requires us to find ways of doing things, including with people with whom we sometimes don’t necessarily fully agree with their approach to doing business, to try to advance things that we think are important, such as restoring and expanding our urban forest,” said Commissioner Steffanie Musich. “I understand this program isn’t perfect. There’s nothing we’re doing here.”
How it works
Since the program’s inception in 2022, the Park Board has sold more than 3,800 offset credits (each representing one ton of carbon dioxide) based on the carbon-sequestering capacity of 32,350 trees planted between 2019 and 2022. Seven local companies, including Xcel Energy , purchased these credits for about $35 to $40 each. CenterPoint Energy is interested in purchasing credits in the near future.
Green Cities Accord and third-party City Forest Credits each receive 10% of sales proceeds. The Park Board retains 80% or a total to date of approximately $104,000.
At an average cost of $150 per tree, the carbon offset program could result in the planting of 693 additional trees after two years.
But none of the profits have been used to plant a single tree. It may be used to purchase trees in 2025, said Park Board spokeswoman Robin Smothers.
Reducing CO2 emissions
As regulators and shareholders pressure companies to reduce their carbon footprints, some are looking for ways to offset the emissions they are struggling to eliminate.
Michaela Neu, director of programs and operations for Green Cities Accord, tells potential buyers that each credit represents a “removal of carbon from the atmosphere” that has tangible impacts ranging from improved air quality to lower local heating and cooling costs.
“All of these factors indicate to our buyers that this asset is a valuable asset that can be used in someone’s portfolio as they look to reduce their carbon footprint,” she said.
The program also provides a layer of legal protection for the registered tree: If the Park Board were to neglect the trees, causing them to die faster than the natural rate, they could no longer be capitalized for credits.
The hope is that the longer the trees are kept alive, the bigger they will grow and the more carbon they will sequester, generating credits that can be sold for as much as the market can bear.
Xcel and CenterPoint have included the purchase of carbon offset credits in their Natural Gas Innovation Act (NGIA) plans – blueprints for reducing carbon emissions that utilities must submit to the Public Utilities Commission – as a form of “carbon capture.”
But the Office of the Attorney General, Ministry of Commerce, Civil Utility Board and a large number clean energy organizations I don’t agree that the credits should count.
Department of Commerce analysts emphasized that because CenterPoint is proposing to purchase carbon credits that the Park Board has planted in recent years, they are not actually funding the planting of additional trees anywhere in CenterPoint’s service area.
“It is only intended to help CenterPoint Energy claim ownership of these carbon reductions, but will not result in additional carbon reductions in the state,” the department concluded. “Additionality is essential to the quality of carbon credits. If the associated greenhouse gas reductions are not additional, purchasing credits instead of reducing a company’s emissions will worsen climate change.”
Attorney Melissa Partin of the Minnesota Center for Environmental Advocacy said carbon offset credits are fundamentally at odds with the NGIA’s goal of reducing actual emissions.
“When utilities purchase offset credits from a program like Minneapolis’ tree planting program, they are not reducing the amount of gas they distribute to customers,” she said. “They’re just continuing with business as usual.”
Financing the urban roof
Commissioner Tom Olsen was the only Park Board member on the finance committee to vote against extending the carbon offset program.
“I think we’re at the point now where if we stay neutral on carbon, we’re going to have several degrees of warming, which will be quite catastrophic,” he said. “We need to move beyond neutrality and toward reduction, by creating deficits, and I don’t think these carbon credit programs are moving enough in that direction.”
But the Park Board faces a painful dilemma: How else can it make enough money to grow Minneapolis’ canopy?
In 2021, an eight-year tree conservation and reforestation levy expired after raising more than $11 million to replace 40,000 public trees lost to emerald ash borers and storms. Now that the Park Board has replaced all of the city’s affected public trees, it can no longer issue a new levy without another disaster, Musich said.
The Park Board also explored whether the Metropolitan Airports Commission could contribute because part of the airport operates on parkland, but the proposal failed to gain traction, she added. Nor have any private companies offered to simply donate to planting trees out of altruism.
After the tree levy expired, the Park Board received $1 million in federal COVID relief funding, which Green Cities Accord, then known as Green Minneapolis, helped lobby for. The Park Board has spent the entire amount on planting and maintaining trees in the past two years.
“So 2025 will be the first year in about a decade that we will only have general fund funds for tree purchases, and we will be limited to purchasing 2,000 to 3,000 trees instead of the 8,000 to 10,000 that we purchased and planted ,” Smoor said.
The Park Board must plant approximately 4,000 trees per year just to replace trees lost to natural attrition. More planting is needed to achieve the goals of expanding urban canopy, especially in parts of the city with lower incomes and more heat islands.
“Honestly, we’ve been talking to experts for years about ways we could try this [with] other cities about what they’re doing, and this is really the only thing we could find that would be viable and big enough to have an impact on what we were trying to do, which was find a new funding source for trees,” Musich said.
