In Juneau, Alaska, a carbon offset project that’s actually working

This story was originally published by Grist. Sign up for Grist’s weekly newsletter here.

When Kira Roberts moved to Juneau, Alaska, last summer, she immediately noticed how the town of 31,000 changes when the cruise ships dock each morning. Thousands of people pour in, only to vanish by evening. As the season winds down in fall, the parade of buses driving through her neighborhood slows, and the trails near her home and the vast Mendenhall Glacier no longer teem with tourists.

“That unique rhythm of Juneau is really striking to me,” she said. “It’s just kind of crazy to think that this is all a mile from my house.”

But Mendenhall is shrinking quickly: The 13-mile-long glacier has retreated about a mile in the past 40 years. Getting all those tourists to Juneau—some 1.5 million this summer by cruise ship alone—requires burning the very thing contributing to its retreat: fossil fuels.

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

Heat pumps are “a no-brainer” in Juneau’s mild (for Alaska) winters, said Andy Romanoff, who administers the fund. Juneau’s grid relies on emissions-free hydropower, so electricity is cheaper and less polluting than oil heat. They also save residents money—Roberts said she was paying around $500 a month on heating oil, and has seen her electricity bill climb just $30.

“The financial difference is huge,” she said

Programs from Monterey, California, to Lancaster, Pennsylvania, have tried using similar models to finance local renewable or energy-efficiency projects, and carbon offsets for flying and other activities are nothing new. But most of the voluntary market for such things is run by large companies backing distant projects. The fund in Juneau is eager to capitalize on the massive tourist interest in its backyard.

The program, which until recently was called the Juneau Carbon Offset Fund, started in 2019 when members of the advocacy organization Renewable Juneau were discussing how to help Juneau achieve its goal of having renewables 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 for climate reasons alone. It envisioned the fund as a way to get the devices—and the fossil fuel reduction they provide—to more residents. 

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

Many voluntary offset projects overestimate the emissions they’re preventing, sometimes by as much as five to 10 times, said Dr. Barbara Haya, director of the Berkeley Carbon Trading Project. “Project developers are making methodological choices that give them more credits instead of less,” she said, and those verifying the claims are not enforcing conservative estimates when there’s uncertainty.

The Alaska Carbon Reduction Fund uses three years of utility bills to determine how much oil a recipient was burning before getting a heat pump. It’s paid for 41 installations since 2019, at an average cost of $7,000, and estimates the devices will prevent 3,125 metric tons of carbon emissions over their 15-year lifespan. Those calculations, plus a subsidy from non-tourism donations, brings its carbon price to $46 a ton. 

That’s more expensive than many voluntary credits, but in line with what Haya said are higher-quality projects. “That looks like the cost of real mitigation,” she said. A more fundamental issue is proving any offset project wouldn’t have happened on its own, Haya said. 

Romanoff believes their 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 recipients, Garri Constantine, lived on far below that when his system was installed. In the three years since, Constantine has become an evangelist for the technology, in part because he no longer spends $300 a month on firewood, trading it for a $50 monthly increase in his electricity bill. 

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

The fund has $150,000 in the bank, Romanoff said, but the speed with which it can work is limited by a nationwide shortage of installers. Most of those donations came from the nearby gold mine, but Allen Marine, a regional tour operator, started pitching the fund to passengers this summer and offers an opt-in donation when booking online. It considered the fund an opportunity to “give back to the communities that we operate in,” said Travis Mingo, VP of operations. As part of the partnership, the carbon reduction fund agreed to start funding heat pumps in other Allen Marine destinations, like Ketchikan and Sitka.

A much smaller company, Wild Coast Excursions, includes the offset in its prices. When owner Peter Nave’s plan for summer tours on the local ski mountain fell through, he shifted to bear viewing and alpine hiking trips, some of which are far enough away to require helicopter rides. Climate change is especially visible for Nave, a Juneau native who’s seen the dramatic changes in Mendenhall up close and has worked as a state avalanche forecaster. He’s covering a 125 percent offset of the climate impact of those excursions, labeling his company “carbon-negative.” He estimates that will end up being about 1 percent of the price of each tour. In his mind, it’s simply a cost of doing business.

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

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

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

The Alaska Carbon Reduction Fund began pursuing verification with Verra, the world’s largest certifier of voluntary credits by volume, but walked away because of the cost and its own discomfort over negative press coverage. “We could install five or six heat pumps with that money,” Romanoff said.

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

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 do list offset purchases in their annual sustainability reports.

While the city charges cruise lines a per-head passenger fee, that revenue can be used only 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 pointed to the industry’s involvement in efforts to reduce cruise line emissions and install electric shore power, the marine equivalent of stopping idling emissions.

Allen Marine has “started discussions” about including an offset fee in its tours sold through cruise lines. “As we go through contract renewals, it will actually start to snowball effect the amount of money we’re able to receive for this program,” Mingo said. But ultimately, that leaves the bulk of tourists’ emissions—the cruises—unaccounted for.

Romanoff gets a few emails a year from people in other parts of Alaska and the Lower 48 interested in setting up their own offset fund. He thinks his organization’s model could be replicated in places with plenty of oil heating systems to replace. That said, a carbon price based on replacing gas-powered heat might be too expensive for most people, he said.

But in the Alaskan panhandle, he thinks a “groundswell” of support from small businesses could make a difference in getting the cruise lines on board. “Once we build that arsenal to a certain size, then I think that’ll speak pretty loud and clear,” he said.