Alaska Gov. Bill Walker (I) says the state needs to drill more oil to mitigate the impact of climate change.

Alaska has no sales or income tax and relies on oil and gas production for much of its operating budget. With oil prices falling, the state's revenue base has taken a hit. But that decline comes as the state is spending an increasing amount on climate change adaptation efforts, including the potential relocation of Arctic communities hit by coastal erosion.

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Walker’s proposed solution: increase oil drilling, including in the Arctic National Wildlife Refuge (ANWR), to boost state revenue and pay for climate change-related programs.

"We are in a significant fiscal challenge. We have villages that are washing away because of changes in the climate," Walker said in an interview with BBC News.

"I don't see anyone putting together contribution funds to help move [the village of] Kivalina; that is our obligation, we stand by that — we need to figure out how to do that. But those are very expensive — we have about 12 villages in that situation.”

Alaska, situated close to the Arctic, has felt the effects of climate change in a more acute way than the rest of the United States. President Obama used a three-day trip to the state this year to highlight climate change and call for more government work to prevent it.

At the same time, the state’s oil and gas industry was delivered a blow last month when Royal Dutch Shell ended an oil exploration mission and abandoned future plans to drill in the Arctic Ocean.

Obama has prevented oil drilling in the ANWR region, but Republicans continue to push for drilling there one day. Walker told the BBC that drilling “in a responsible way as we have in the past” could help ease future climate change-related financial strains in the state.

"This isn't something we can put off for 10-20 years,” he said. “We have to begin this process now — it's an absolute urgency for Alaska."