[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2520 Introduced in House (IH)]
106th CONGRESS
1st Session
H. R. 2520
To authorize the President to enter into agreements to provide
regulatory credit for voluntary early action to mitigate potential
environmental impacts from greenhouse gas emissions.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 1999
Mr. Lazio (for himself, Mr. Dooley of California, Mr. Boehlert, Mr.
Kind, Mr. Castle, Mr. Moran of Virginia, Mr. Saxton, Mr. Roemer, Mr.
Ganske, Mr. Maloney of Connecticut, Mr. Gilchrest, Mr. Price of North
Carolina, and Mr. Smith of Washington) introduced the following bill;
which was referred to the Committee on Commerce
_______________________________________________________________________
A BILL
To authorize the President to enter into agreements to provide
regulatory credit for voluntary early action to mitigate potential
environmental impacts from greenhouse gas emissions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Credit for
Voluntary Actions Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purpose.
Sec. 3. Definitions.
Sec. 4. Authority for voluntary action agreements.
Sec. 5. Entitlement to greenhouse gas reduction credit for voluntary
action.
Sec. 6. Baseline and base period.
Sec. 7. Sources covered by voluntary action agreements.
Sec. 8. Measurement and verification.
Sec. 9. Participation by manufacturers and adopters of end-use,
consumer, and similar technology.
Sec. 10. Increases in domestic carbon stocks.
Sec. 11. Trading and pooling.
Sec. 12. Relationship to future domestic greenhouse gas regulatory
statute.
SEC. 2. PURPOSE.
(a) In General.--The purpose of this Act is to encourage voluntary
actions to mitigate potential environmental impacts of greenhouse gas
emissions by authorizing the President to enter into binding agreements
under which entities operating in the United States will receive
credit, usable in any future domestic program that requires mitigation
of greenhouse gas emissions, for voluntary mitigation actions taken
before the end of the credit period and to ensure that their future
emission baselines reflect these actions.
(b) Rules of Construction Regarding Kyoto Protocol and Federal
Regulatory Actions.--This Act may not be construed--
(1) as an indication of support for, or an endorsement or
ratification of, the Kyoto Protocol; or
(2) as establishing an obligation on the part of the
Congress to enact a domestic greenhouse gas regulatory statute
(as defined in section 3(9)).
SEC. 3. DEFINITIONS.
In this Act:
(1) Afforestation.--The term ``afforestation'' means
conversion of non-forest to forest on lands that have,
historically, not contained forests and did not in 1990.
(2) Baseline carbon stocks.--The term ``baseline carbon
stocks'' means the average amount of carbon stocks (in tons
carbon) estimated to be present on a participant's land during
the participant's base period.
(3) Best management practices.--The term ``best management
practices'' means sustainable land-management practices that
conserve resources while maintaining long-term productivity.
(4) Carbon reservoir.--The term ``carbon reservoir'' means
quantifiable nonfossil storage of carbon in a natural or
managed ecosystem or other reservoir.
(5) Carbon stocks.--The term ``carbon stocks'' means living
biomass carbon, dead biomass carbon, and soil carbon (organic
and mineral soils).
(6) Compliance period.--The term ``compliance period''
means any period during which a domestic greenhouse gas
regulatory statute is in effect.
(7) Credit period.--The term ``credit period'' means--
(A) the period of January 1, 1999, through the
earlier of--
(i) the day before the beginning of the
compliance period; or
(ii) the end of the ninth calendar year
that begins after the date of enactment of this
Act; or
(B) if a different period is determined for a
participant under section 5(e) or 6(c)(4), the period
so determined.
(8) Domestic.--The term ``domestic'' means within the
territorial jurisdiction of the United States.
(9) Domestic greenhouse gas regulatory statute.--The term
``domestic greenhouse gas regulatory statute'' means a Federal
statute, enacted after the date of enactment of this Act, that
imposes a quantitative limitation on domestic greenhouse gas
emissions.
(10) Ecosystems.--The term ``ecosystems'' include above-
and below-ground living biomass, soils (organic and mineral),
and necromass.
(11) Existing source.--The term ``existing source'' means a
source that emitted greenhouse gases during the participant's
base period determined under section 6.
(12) Forest.--The term ``forest'' means land at least 10
percent occupied by forest trees of any size or formerly having
had such tree cover and not currently developed for non-forest
use. Lands developed for non-forest use include areas for
crops, improved pasture, residential, or administrative areas,
improved roads of any width, and adjoining road clearing and
powerline clearing of any width. The land must be a minimum of
one acre in area. Roadside, streamside, and shelterbelt strips
of timber must have a crown width of at least 120 feet to
qualify as forest land; and unimproved roads, trails, streams,
and clearings within forest areas are classified as forest land
if they are less than 120 feet wide (USDA Forest Service 1972).
(13) Greenhouse gas.--The term ``greenhouse gas'' means--
(A) carbon dioxide;
(B) methane;
(C) nitrous oxide;
(D) hydrofluorocarbons;
(E) perfluorocarbons; and
(F) sulfur hexafluoride.
(14) Greenhouse gas reduction credit.--The term
``greenhouse gas reduction credit'' means an authorization
under a domestic greenhouse gas regulatory statute to emit 1
metric ton of greenhouse gas (expressed in terms of carbon
dioxide equivalent) that is provided because of greenhouse gas
emission reductions or carbon sequestration carried out before
the compliance period.
(15) Mature primary forest.--The term ``mature primary
forest'' means forests where the majority of dominant and
codominant trees are greater than 100 years of age and where
there is no history of significant direct human disturbance,
with the exception of prescribed fire, over the last 100 years.
(16) New source.--The term ``new source'' means--
(A) a source other than an existing source; and
(B) a facility that would be a source but for the
facility's use of renewable energy.
(17) Own.--The term ``own'' means to have direct or
indirect ownership of an undivided interest in an asset.
(18) Participant.--The term ``participant'' means a person
that enters into a voluntary action agreement with the United
States under this Act.
(19) Person.--The term ``person'' includes a governmental
entity.
(20) Reforestation.--The term ``reforestation'' means
conversion of non-forest to forest on lands which had,
historically, contained forests but which had been converted to
some other use as of 1990.
(21) Region.--The term ``region'' has the meaning
applicable pursuant to the inventory and analysis survey unit
or units of the United States Forest Service in which the
participant's lands are located.
(22) Source.--The term ``source'' means a source of
greenhouse gas emissions.
(23) Ton-year.--The term ``ton year'' means the maintenance
of a carbon stock of one ton for one year.
(24) Voluntary action agreement.--The term ``voluntary
action agreement'' means an agreement with the United States
entered into under section 4(a).
SEC. 4. AUTHORITY FOR VOLUNTARY ACTION AGREEMENTS.
(a) Authority.--
(1) In general.--The President may enter into a legally
binding voluntary action agreement with any person under which
the United States agrees to provide greenhouse gas reduction
credit usable beginning in the compliance period, if the person
takes an action described in section 5 that reduces greenhouse
gas emissions or section 10 that sequesters carbon before the
end of the credit period.
(2) Requirements.--A voluntary action agreement entered
into under paragraph (1) shall meet either--
(A) the requirements for voluntary action
agreements under sections 5 through 8;
(B) in the case of a participant described in
section 9, the requirements of that section; or
(C) in the case of carbon sequestration, the
requirements of section 10.
(b) Delegation.--The President may delegate any authority under
this Act to any Federal department or agency.
(c) Regulations.--The President may promulgate such regulations
(including guidelines) as are appropriate to carry out this Act.
SEC. 5. ENTITLEMENT TO GREENHOUSE GAS REDUCTION CREDIT FOR VOLUNTARY
ACTION.
(a) Creditable Actions Which Result in Increases to United States
Limitations.--A participant shall receive greenhouse gas reduction
credit under a voluntary action agreement if the participant takes an
action that--
(1) reduces greenhouse gas emissions or sequesters carbon
before the end of the credit period; and
(2) will result in an addition to the United States
quantified emission limitation during the credit period.
(b) United States Initiative for Joint Implementation.--
(1) In general.--Subject to paragraph (2), a voluntary
action agreement may provide that a participant shall be
entitled to receive greenhouse gas reduction credit for a
greenhouse gas emission reduction or carbon sequestration
that--
(A) is not creditable under subsection (a); and
(B) is for a project--
(i) accepted before December 31, 2000,
under the United States Initiative for Joint
Implementation; and
(ii) financing for which was provided or
construction of which was commenced before that
date.
(2) Limitation on period during which credit may be
earned.--No greenhouse gas reduction credit may be earned under
this subsection after the earlier of--
(A) the earliest date on which credit may be earned
for a greenhouse gas emission reduction, carbon
sequestration, or comparable project under a
Congressionally authorized domestic greenhouse gas
regulatory statute; or
(B) the end of the credit period.
(c) Prospective Domestic Actions.--
(1) Emission reductions.--A participant shall receive
greenhouse gas reduction credit under a voluntary action
agreement if during the entire credit period the participant's
aggregate greenhouse gas emissions from domestic sources that
are covered by the voluntary action agreement are less than the
sum of the participant's annual source baselines during that
entire period (as determined under section 6 and adjusted under
subsections (a)(2), (c)(1), and (c)(2) of section 7).
(2) Sequestration.--For the purpose of receiving greenhouse
gas reduction credit under paragraph (1), the amount by which
aggregate net carbon sequestration for the credit period in a
participant's domestic carbon reservoirs covered by a voluntary
action agreement exceeds the sum of the participant's annual
reservoir baselines for the credit period (as determined under
section 6 and adjusted under section 7(c)(1)(B)) shall be
treated as a greenhouse gas emission reduction.
(d) Retrospective Domestic Actions.--
(1) Credit.--A voluntary action agreement may provide that
a participant shall be entitled to receive 1 ton of greenhouse
gas reduction credit for each ton of greenhouse gas emission
reductions or carbon sequestration for the 1991 through 1998
period from domestic actions that are--
(A) reported before January 1, 1999, under section
1605 of the Energy Policy Act of 1992 (42 U.S.C.
13385); or
(B) carried out and reported before January 1,
1999, under a Federal agency program to implement other
recognized greenhouse gas reductions efforts.
(2) Verification.--The participant shall provide
information sufficient to verify to the satisfaction of the
President (in accordance with section 8 and the regulations
promulgated under section 4(c)) that actions reported under
paragraph (1)--
(A) have been accurately reported;
(B) are not double-counted; and
(C) represent actual reductions in greenhouse gas
emissions or actual increases in net carbon
sequestration.
(3) Third-party certification.--All submissions made
pursuant to paragraph (2) shall be certified by qualified
third-party auditors.
(e) Extension.--The parties to a voluntary action agreement may
extend the credit period during which greenhouse gas reduction credit
may be earned under the voluntary action agreement, if Congress permits
such an extension by law enacted after the date of enactment of this
Act.
(f) Award of Greenhouse Gas Reduction Credit.--
(1) Annual notification of cumulative balances.--After the
end of each calendar year, the President shall notify each
participant of the cumulative balance (if any) of greenhouse
gas reduction credit earned under a voluntary action agreement
as of the end of the calendar year.
(2) Annual report to congress.--After the end of each
calendar year, the President shall notify Congress of the
cumulative balance of greenhouse gas emissions credits
potentially earned under all voluntary action agreements as of
the end of that calendar year, and shall notify Congress within
30 days of a determination that the cumulative balance of
greenhouse gas emission credits potentially earned under all
voluntary action agreements as of that time has reached, or
exceeded, 365,000,000.
(3) Award of final credit.--Effective at the end of the
credit period, a participant shall have a contractual
entitlement, to the extent provided in the participant's
voluntary action agreement, to receive 1 ton of greenhouse gas
reduction credit for each 1 ton that is creditable under
subsections (a) through (d).
(g) Automatic Fire Suppression Systems.--Credits shall not be
issued under this Act for the reduction of greenhouse gases used in
automatic fire suppression systems provided that such greenhouse
gases--
(1) remain in an approved fire suppression system
maintained strictly according to NFPA 2001 to ensure against
accidental or unnecessary discharges; and
(2) upon decommissioning, the greenhouse gases in the
system are chemically transformed to eliminate any and all
global warming potential.
SEC. 6. BASELINE AND BASE PERIOD.
(a) Source Baseline.--A participant's annual source baseline for
each of the calendar years in the credit period shall be equal to the
participant's average annual greenhouse gas emissions from domestic
sources covered by the participant's voluntary action agreement during
the participant's base period, adjusted for the calendar year as
provided in subsections (a)(2), (c)(1), and (c)(2) of section 7, or
subsections (c) and (d) of section 9, or subsection (e) of section 9. A
participant's annual source baseline shall not include emissions that
resulted from failure to comply with applicable requirements in force
during the base period.
(b) Reservoir Baseline.--A participant's annual reservoir baseline
for each of the calendar years in the credit period shall be equal to
the average level of carbon stocks in carbon reservoirs covered by the
participant's voluntary action agreement for the participant's base
period, adjusted for the calendar year as provided in section 7(c)(1).
(c) Base Period.--
(1) In general.--Except as provided in paragraphs (2) and
(3), a participant's base period shall be an average of the 3-
year period ending with the year of enactment of this Act.
(2) Data unavailable or unrepresentative.--The regulations
promulgated under section 4(c) may specify a base period other
than the period described in section 6(c)(1) that will be
applicable if adequate data are not available to determine a
baseline for those years or if such data are unrepresentative.
(3) Elections.--The regulations promulgated under section
4(c) may permit a participant to elect a base period earlier
than the period described in section 6(c)(1) (not to include
any year earlier than 1990) to reflect voluntary reductions
made before that period.
(4) Adjustment of period during which credit may be
earned.--Notwithstanding subsections (c) and (d) of section 5,
except as otherwise provided by the regulations promulgated
under section 4(c), if an election is made for a base period
earlier than 1996--
(A) greenhouse gas reduction credit shall be
available under section 5(c) for the calendar year that
begins after the end of the base period and any
calendar year thereafter through the end of the credit
period; and
(B) greenhouse gas reduction credit shall be
available under section 5(d) only through the end of
the base period.
SEC. 7. SOURCES COVERED BY VOLUNTARY ACTION AGREEMENTS.
(a) Sources.--
(1) In general.--
(A) Covered sources.--Except as otherwise provided
in this subsection, a participant's voluntary action
agreement shall cover all domestic greenhouse gas
sources that the participant owns as of the date on
which the voluntary action agreement is entered into.
(B) Exclusions.--The regulations promulgated under
section 4(c) (or the terms of an early action
agreement) may exclude from coverage under a voluntary
action agreement small or diverse sources owned by the
participant where the emissions represent a de minimis
percentage of the participant's total emissions.
(2) Economic change.--
(A) In general.--The regulations promulgated under
section 4(c) shall provide that a voluntary action
agreement shall provide for annual addition to, or
deduction from, a participant's emissions baseline to
account for economic change.
(B) Calculations.--Each participant's annual
baseline shall be the product of--
(i) its baseline emissions;
(ii) the participant's economic change
factor; and
(iii) the GDP adjustment factor.
(C) Terms.--
(i) Economic change factor.--For purposes
of subparagraph (B)(ii), the economic change
factor represents the ratio, expressed in
percentage terms, of the product output of the
participant during the year and the average
annual product output of the participant during
the base period.
(ii) GDP adjustment factor.--For purposes
of subparagraph (B)(iii), the GDP adjustment
factor, expressed in percentage terms,
represents the difference between 100 and the
percentage by which the Gross Domestic Product
of the United States has increased since the
base period.
(iii) Demand-side management.--For purposes
of clause (i), in the case of electricity
generators, the calculations of product output
shall take into account reductions in output
due to demand-side management investments.
(b) Opt-In Provisions.--
(1) Opt-in for other owned sources.--Domestic sources owned
by a participant that are not required to be covered under
subsection (a) may be covered under a voluntary action
agreement at the election of the participant.
(2) Opt-in for carbon reservoirs.--
(A) In general.--A voluntary action agreement may
provide that domestic carbon reservoirs owned by a
participant may be covered under the voluntary action
agreement at the election of the participant.
(B) Coverage.--Except in the case of small or
diverse carbon reservoirs owned by the participant (as
provided in the regulations promulgated under section
4(c)), if a participant elects to have domestic carbon
reservoirs covered under the voluntary action
agreement, all of the participant's domestic carbon
reservoirs shall be covered under the voluntary action
agreement.
(c) Accounting Rules.--
(1) Transfers.--If ownership of a carbon stock covered by a
voluntary action agreement is transferred to or from the
participant--
(A) the carbon stocks shall be adjusted to reflect
the transfer for the participant's base period;
(B) the net carbon sequestration shall be adjusted
to reflect the transfer for each year for which
greenhouse gas reduction credit is claimed; and
(C) pro rata adjustments shall be made to reflect
transfers that occur during a program year.
(2) Displacement of emissions.--In addition to the baseline
adjustments made pursuant to subsection (a)(2), a voluntary
action agreement shall contain effective and workable
provisions that ensure that only net emission reductions will
be credited under section 5 in circumstances in which emissions
are displaced, as a result of outsourcing, from sources covered
by a voluntary action agreement to other sources.
(3) Period of coverage.--Emissions from sources and net
carbon sequestration in carbon reservoirs shall be covered by a
voluntary action agreement for the entire credit period, except
as provided under paragraph (1) or by the regulations
promulgated under section 4(c).
SEC. 8. MEASUREMENT AND VERIFICATION.
(a) In General.--In accordance with the regulations promulgated
under section 4(c), a voluntary action agreement shall--
(1) provide that, for each calendar year during which the
voluntary action agreement is in effect, the participant shall
report to the United States, as applicable--
(A) the participant's annual source baseline and
greenhouse gas emissions for the calendar year; and
(B) the requirements of section 10(d) pertaining to
carbon sequestration for the calendar year.
(2) establish procedures under which the participant will
measure, track, and report the information required by
paragraph (1);
(3) establish requirements for maintenance of records by
the participant and provisions for inspection of the records by
representatives of the United States; and
(4) permit qualified independent third party entities to
measure, track, and report the information required by
paragraph (1) on behalf of the participant.
(b) Availability of Reports to the Public.--Reports required to be
made under subsection (a)(1) shall be available to the public.
(c) Confidentiality.--The regulations promulgated under section
4(c) shall make appropriate provision for protection of confidential
commercial and financial information.
SEC. 9. PARTICIPATION BY MANUFACTURERS AND ADOPTERS OF END-USE,
CONSUMER, AND SIMILAR TECHNOLOGIES.
(a) In General.--In the case of a participant that manufactures or
constructs for sale to end-users equipment or facilities that emit
greenhouse gases or which adopt end use efficiency technologies, the
President may enter into a voluntary action agreement.
(b) Emissions Baselines.--For each participant under subsection
(a), its emissions baseline shall be established by determining the
average annual number of products of the same type sold by the
participant in the United States during the base period and multiplying
that number by the expected useful life of the product and a numerical
factor to determine the greenhouse gas emissions resulting from the
electricity generated, or fossil fuel consumed, in connection with the
operation of the product.
(c) Economic Change.--
(1) Calculations.--Each participant's annual baseline shall
be the product of--
(A) its baseline emissions;
(B) the participant's economic change factor; and
(C) the GDP adjustment factor.
(2) Terms.--
(A) Economic change factor.--For purposes of
paragraph (1)(B), the economic change factor represents
the ratio, expressed in percentage terms, of the
products of the same type sold by the participant
during the year and the average annual number of such
products sold by the participant during the base
period.
(B) GDP adjustment factor.--For purposes of
paragraph (1)(C), the GDP adjustment factor, expressed
in percentage terms, represents the difference between
100 and the percentage by which the Gross Domestic
Product of the United States has increased since the
base period.
(d) Calculation of Credits.--Each participant shall be entitled to
receive greenhouse gas emissions reduction credits in an amount equal
to the difference between--
(1) the sum of its annual emissions baselines for the
program period, as calculated pursuant to subsections (b) and
(c); and
(2) the product of--
(A) the number of products sold by the participant
in the United States;
(B) the expected useful life of each product; and
(C) the numerical factor used to determine the
greenhouse gas emissions resulting from the electricity
generated, or fossil fuel consumed, in connection with
the operation of the product.
(e) Automotive Vehicles.--
(1) In general.--Participants that manufacture automobiles,
including both passenger vehicles and light-duty trucks, may
enter into agreements authorized by this section.
(2) Calculation of emissions baseline, annual baseline, and
reduction credits.--For purposes of this section, the
calculation of each participant's emissions baseline, annual
baseline, and reduction credits shall be based on the methods
and factors used in subsections (b), (c), and (d), which shall
be used to determine the greenhouse gas emissions reductions
achieved, and credits awarded, as a result of improvements made
by the participant in the actual fuel economy of its passenger
vehicles and light duty trucks.
(f) Prevention of Double-Counting.--In the event the President
determines that the adjustments to participants' baselines made
pursuant to section 7(a)(2) are not adequate to effect the purposes of
this subsection, the regulations promulgated under section 4(c) shall
include provisions to ensure that, notwithstanding any other provision
of this Act, no more than one credit shall be awarded for each ton of
emissions of greenhouse gas emissions reduced pursuant to the
agreements entered into pursuant to this Act.
SEC. 10. INCREASES IN DOMESTIC CARBON STOCKS.
(a) Purpose.--The purpose of this section is to ensure that
voluntary action credits earned for approved actions leading to
increases in domestic carbon stocks are of a sufficient quality to
allow comparable and tradable with other credits authorized by this
Act.
(b) In General.--A voluntary action agreement shall provide that a
participant may be entitled to receive greenhouse gas reduction credit
for permanent protection of carbon stocks in mature primary forests,
reforestation and afforestation, and improved forest carbon stock
management in forests that have merchantable timber.
(c) Calculations.--Credits shall be subject to potential debiting
pursuant to section 10(c)(2)(A), or shall be counted in ton-year
credits pursuant to section 10(c)(2)(B).
(1) Permanent protection.--In the case of permanent
protection of mature primary forests where protection is
initiated during the credit period, credits shall be equal to
50 percent of the carbon stock in above and belowground live
biomass, measured by the end of the credit period.
(2) Reforestation and afforestation.--For reforestation and
afforestation initiated during the credit period, credits will
be equal to the full net increases in carbon stocks generated
by project activities during the credit period.
(3) Improved forest carbon stock management.--In forests
that are not being permanently protected and have merchantable
timber, creditable net increases in carbon stocks must be
additional to those which would have occurred in the absence of
this legislation. These net increases are subject to
adjustments for leakage.
(A) Additionally.--For improved forest carbon stock
management, the annual amount of carbon stock increase
that is considered additional to that which would have
occurred in the absence of this legislation shall be
the difference between the net rate of increase in
carbon stocks during the credit period on all land
owned by the participant within the region, and the
average net rate of increase in carbon stocks on the
same area of land in similar privately owned forest
lands within the region. For the purpose of this
analysis, regulations promulgated under section 4(c)
shall establish average rates of change of carbon
stocks for forest type, productivity class, age, and
region, taking into account the most recent forest
inventory and analysis data. All analyses of rates of
change in carbon stocks shall exclude all
submerchantable timber. If the average per acre rate of
change in carbon stocks in similar forests within the
region is less than zero, net changes in those carbon
stocks shall be regarded as zero for the purpose of
comparison with the rates of change on an individual
landowner's property.
(B) Leakage.--If improved forest carbon stock
management results in a reduction in timber supply from
the participant's lands, there will be a deduction in
claimed credits equal to the product of the amount of
reduction in timber supply and the average direct and
indirect carbon emissions associated with supplying
similar timber. These emissions shall include those
identified in tables developed pursuant to section
10(d). No deduction for leakage will be required if it
can be demonstrated that the net rate of carbon stock
increase in the region has risen for the last period
for which such data is available, and the aggregate
output of all timber, fiber, and fuel producing mills
and facilities in the region has not declined,
subtracting any production which relied on imports of
timber or fiber from outside the region.
(d) Limitations.--
(1) Coverage.--The following applies under this section:
(A) Only private lands, and such lands that are
transferred into permanent protection under State or
Federal jurisdiction during the credit period, are
eligible to participate in the program established by
this section.
(B) Mature primary forests, and lands on which
reforestation and afforestation is initiated during the
credit period, are eligible for crediting under the
provisions of this legislation. Where increases in
carbon stocks are achieved through improved forest
carbon stock management, forests must be, at a minimum,
old enough to have merchantable timber to be eligible.
To determine the minimum age needed for these lands to
be eligible, rules issued under this Act shall describe
methods for determining forest age, and define the age
at which different forest types produce merchantable
pulpwood, sawtimber, or other timber products commonly
sold by landowners in the applicable region. For the
purposes of this Act, the age of the forest management
unit (each not to exceed 100 acres) is the oldest age
class that represents at least 20 percent of the
standing timber.
(C) A participant must enroll all the forest land
it owns to participate in the program established by
this section, except those lands used only for
ecosystem preservation during the entire early action
period, and small or diverse land holdings that
represent a de minimis percentage of the participant's
total carbon stocks. For the purposes of this Act, a
participant owns forest land if it owns a controlling
interest in the timber on the land. To reduce transaction costs,
landowners may pool their lands for enrollment and act as a single
participant. Changes in carbon stocks, on all lands enrolled need to be
included, and for those lands with a net loss in carbon stocks the loss
needs to be subtracted from the creditable gain in carbon stocks
calculated under this section.
(2) Durability.--The following applies under this section:
(A) The participant may elect to receive credit
equal to the net increase in carbon stocks during the
credit period, as calculated under section 10(b). Under
this election, if at any time before 50 years have
passed since specific tracts were enrolled in the
program, the stock of carbon on those tracts covered by
the agreement is less than the stock of carbon at the
end of the credit period, the participant shall retire
a number of greenhouse gas reduction credits equal to
the difference between the 2 amounts.
(B) If the participant elects not to count the
greenhouse gas reductions accruing from their
activities as described above, the participant will be
awarded a fraction of 1 ton of credit (a ton-year
credit) for each year that the carbon stock is
maintained. This fraction shall be defined by the
Government agency responsible for the implementation of
this Act.
(3) Land stewardship.--The following applies under this
section:
(A) To prevent the establishment of forests in
areas that currently support natural vegetative
communities other than forests, no credits will be
granted for afforestation of areas historically not
forested unless those areas have been supporting
systems other than natural vegetative communities (e.g.
cropland, non-native grasslands, abandoned mine lands,
parking lots) since 1990.
(B) Credits for carbon stock increases from land
use activities should encourage wise land stewardship.
All lands enrolled in a program for voluntary action
carbon credits must adhere to best management practices
as specified on a regional or State basis by the
appropriate Federal or State agency.
(4) Credit limit.--No more than 20 percent of the
greenhouse reduction credits allocated under this Act shall be
awarded for carbon stock increases under this section.
(e) Monitoring, Reporting, and Verification.--
(1) Monitoring guidelines.--The rules issued pursuant to
section 4(c) shall include monitoring guidelines that, at a
minimum, provide:
(A) Accurate and transparent carbon stock
monitoring protocols based on statistically robust
inventory, soil sampling, ecological survey, and other
applicable scientific techniques.
(B) Requirements for periodic monitoring of
creditable activities. All enrolled carbon stocks that
may be decreasing, and significant indirect increases
in greenhouse gas emissions caused by project
activities, must be monitored and subtracted from
credits. Monitoring of enrolled carbon stocks that are
increasing is at the discretion of the participant.
Only monitored stocks may be included in calculations
under sections 10(a) and 10(b).
(C) Tables of estimated greenhouse gas emissions
associated with land management activities that result
in significant indirect increases in greenhouse gas
emissions (such as fertilizer production and
application, herbicide production, and fossil fuel
consumption).
(D) Procedures for delineating which carbon stocks
on a participant's lands that may be decreasing during
the credit period due to project activities need to be
monitored.
(E) Procedures for estimating baseline carbon
stocks on each participant's lands.
(F) Procedures to allow for appropriate estimation
of carbon stocks using tables and models derived from
forest inventory and analysis data of the United States
Forest Service or other credible sources for the
appropriate region, forest type, age, stand management
history, and site productivity.
(2) Reporting guidelines.--The rules issued pursuant to
section 4(c) shall include reporting guidelines that, at a
minimum, provide as follows:
(A) Participants shall report claimed net increases
in carbon stocks during the credit period to the
Government agency responsible for implementation of
this Act, which will then evaluate the participant's
compliance with the guidelines. If not in compliance,
the participant will be notified and advised what
remedial actions are needed. Participants may not
receive greenhouse gas reduction credits until they are
in compliance with the guidelines issued under this
Act.
(B) Each participant's report must be supported by
a report from a recognized third party auditor. The
auditor must verify the carbon credits using a
statistically robust evaluation of a valid subsample of
the participant's lands.
(3) Eligibility for assistance.--Participants who own less
than 50,000 acres will be eligible for monitoring and
verification assistance.
SEC. 11. TRADING AND POOLING.
(a) Trading.--A participant may--
(1) purchase earned greenhouse gas reduction credit from
and sell the credit to any other participant; and
(2) sell the credit to any person that is not a
participant.
(b) Pooling.--The regulations promulgated under section 4(c) may
permit pooling arrangements under which a group of participants agrees
to act as a single participant for the purpose of entering into a
voluntary action agreement.
SEC. 12. RELATIONSHIP TO FUTURE DOMESTIC GREENHOUSE GAS REGULATORY
STATUTE.
A voluntary action agreement shall not bind the United States to
adopt (or not to adopt) any particular form of domestic greenhouse gas
regulatory statute, except that a voluntary action agreement shall
provide that--
(1) greenhouse gas reduction credit earned by a participant
under a voluntary action agreement shall be provided to the
participant in addition to any otherwise available
authorizations of the participant to emit greenhouse gases
during the compliance period under a domestic greenhouse gas
regulatory statute; and
(2) if the allocation of authorizations under a domestic
greenhouse gas regulatory statute to emit greenhouse gases
during the compliance period is based on the level of a
participant's emissions during a historic period that is later
than the participant's base period under the participant's
voluntary action agreement, any greenhouse gas reduction credit
to which the participant was entitled under the voluntary
action agreement for domestic greenhouse gas reductions during
that historic period shall, for the purpose of that allocation,
be added back to the participant's greenhouse gas emissions
level for the historic period.
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