The Minneapolis Park Board is poised to extend 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 come over the objection of a minority of commissioners, who say the system amounts to "greenwashing" — allowing companies to say they are environmentally friendly but actually allowing them to shortcut carbon-reduction goals.

"I would love to explore other avenues that don't basically give other ... people a way to assuage their guilty conscience and a license to pollute," said Commissioner Becky Alper.

Other commissioners say the Park Board is in a budget crunch and has to be willing to be creative.

"We exist in a capitalist structure that requires that we find ways to do things, including with people that we sometimes don't necessarily fully agree with their approach to doing business, to try to further things that we feel are important, like restoring our urban forest and expanding it," said Commissioner Steffanie Musich. "I understand this program is not perfect. There is nothing here that we do that is."

How it works

Since the program started in 2022, the Park Board has sold more than 3,800 offset credits (each representing one metric ton of carbon dioxide) based on the carbon-sequestering power of 32,350 trees planted between 2019 and 2022. Seven local companies, including Xcel Energy, have purchased these credits for about $35 to $40 a pop. CenterPoint Energy is interested in buying credits in the near future.

Green Cities Accord and third-party registry City Forest Credits each get 10% of the sales revenue. The Park Board keeps 80% or a total so far of about $104,000.

At an average cost of $150 per tree, after two years the carbon offset program could pay for planting 693 additional trees.

But none of the profits has been used to plant a single tree. It may be used to purchase trees in 2025, said Park Board spokeswoman Robin Smothers.

Reducing carbon emissions

As regulatory agencies and stockholders pressure companies to reduce their carbon footprint, some are searching for ways to offset the emissions they are finding hard to eliminate.

Green Cities Accord's director of programs and operations, Michaela Neu, tells prospective buyers that each credit represents a "removal of carbon from the atmosphere" that have tangible impacts ranging from improved air quality to lower local heating and cooling costs.

"All of these factors indicate to our purchasers that this asset is a valuable component that can be utilized in one's portfolio as they look to reduce their carbon footprint," she said.

The program also provides a veneer of legal protection for its enrolled tree: If the Park Board were to neglect the trees, causing them to die at a rate exceeding natural attrition, they could no longer be capitalized for credits.

The hope is that the longer the trees are kept alive, the bigger they get and the more carbon they will sequester, allowing them to generate credits to be sold for as much as the market will 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 are required to submit to the Public Utilities Commission — as a form of "carbon capture."

But the Attorney General's Office, Department of Commerce, Citizens Utility Board and a host of clean energy organizations don't agree that the credits should count.

Commerce Department analysts emphasized that because CenterPoint is proposing to buy carbon credits that the Park Board planted in past years, they aren't really funding the planting of any additional trees anywhere in CenterPoint's service territory.

"It is only meant to help CenterPoint Energy claim ownership of these carbon reductions, but does not produce any additional carbon reductions in the state," the department concluded. "Additionality is essential for the quality of carbon credits – if their associated greenhouse gas reductions are not additional, then purchasing credits in lieu of reducing a company's emissions will make climate change worse."

Melissa Partin, climate policy analyst with the Minnesota Center for Environmental Advocacy, said carbon offset credits are fundamentally at odds with the purpose of the NGIA, which is to reduce actual emissions.

"If utilities purchase offset credits from a program like Minneapolis' tree planting program, they aren't reducing the amount of gas they distribute to customers," she said. "They're just continuing with business as usual."

Funding the urban canopy

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 have to move past neutrality and move towards reduction, in creating deficits, and I see these carbon credit programs as not moving in that direction enough."

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 Preservation and Reforestation Levy expired after raising more than $11 million to replace 40,000 public trees lost to emerald ash borer and storms. Now that the Park Board has replaced all of the city's infested public trees, it can't issue another levy without another disaster, Musich said.

The Park Board also looked into getting the Metropolitan Airports Commission to contribute because part of the airport operates on parkland, but that the proposal gained no traction, she added. Neither have any private companies offered to simply donate to tree planting out of altruism.

After the tree levy expired, the Park Board received $1 million in federal COVID relief funding, for which Green Cities Accord, then known as Green Minneapolis, helped lobby. The Park Board spent all of it on planting and maintaining trees in the past two years.

"So, 2025 is the first year in about 10 years that we will only have general funds for tree procurement, and we'll be limited to purchase 2,000 to 3,000 trees instead of the 8,000 to 10,000 we've been procuring and planting," Smothers said.

The Park Board must plant about 4,000 trees a year just to replace trees lost to natural attrition. It must plant even more to meet its goals of expanding the urban canopy, especially in lower-income parts of the city with more heat islands.

"Quite honestly, we spent years talking with experts about ways that we could try to do this and [with] other cities about what they're doing, and this is really the only thing we could find that would be viable and large enough to have an impact on what we were attempting to do, which is find a new source of funding for trees," Musich said.