Text: H.R.620 — 110th Congress (2007-2008)All Bill Information (Except Text)

There is one version of the bill.

Text available as:

Shown Here:
Introduced in House (01/22/2007)


110th CONGRESS
1st Session
H. R. 620

To accelerate the reduction of greenhouse gas emissions in the United States by establishing a market-driven system of greenhouse gas tradeable allowances that will limit greenhouse gas emissions in the United States, reduce dependence upon foreign oil, and ensure benefits to consumers from the trading in such allowances, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES
January 22, 2007

Mr. Olver (for himself, Mr. Gilchrest, Mr. Inslee, Mr. Walsh of New York, Mr. Cummings, Mr. Kirk, Ms. Solis, Mr. Castle, Mr. Hinchey, Mr. Shays, Ms. Harman, Mr. Saxton, Mr. Dicks, Ms. McCollum of Minnesota, Ms. DeGette, Mr. Thompson of California, Mr. Cardoza, and Mr. Hare) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Science and Technology and Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To accelerate the reduction of greenhouse gas emissions in the United States by establishing a market-driven system of greenhouse gas tradeable allowances that will limit greenhouse gas emissions in the United States, reduce dependence upon foreign oil, and ensure benefits to consumers from the trading in such allowances, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Short title.

This Act may be cited as the “Climate Stewardship Act of 2007”.

SEC. 2. Table of contents.

The table of contents for this Act is as follows:


Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Definitions.

Sec. 101. National Greenhouse Gas Database and registry established.

Sec. 102. Inventory of greenhouse gas emissions for covered entities.

Sec. 103. Greenhouse gas reduction registration.

Sec. 104. Measurement and verification.

Sec. 121. Covered entities must submit allowances for emissions.

Sec. 122. Compliance.

Sec. 123. Exemption of source categories.

Sec. 124. Establishment of tradeable allowances.

Sec. 125. Penalties.

Sec. 141. Trading.

Sec. 142. Banking.

Sec. 143. Borrowing against future reductions.

Sec. 144. Domestic offsets.

Sec. 145. International credits plan.

Sec. 161. Determination of tradeable allowance allocations.

Sec. 162. Provision of tradeable allowances.

Sec. 163. Ensuring target adequacy.

Sec. 164. Initial allocations for early participation and accelerated participation.

Sec. 165. Bonus for accelerated participation.

Sec. 201. Establishment.

Sec. 202. Purposes and functions.

Sec. 301. NOAA report on climate change effects; preparation assistance.

Sec. 302. Adaptation technologies.

Sec. 303. Mitigating climate change’s impacts on the poor.

Sec. 304. Wildlife conservation.

SEC. 3. Definitions.

In this Act:

(1) ADMINISTRATOR.—The term “Administrator” means the Administrator of the Environmental Protection Agency.

(2) BASELINE.—The term “baseline” means the historic greenhouse gas emission levels of an entity, as adjusted upward by the Administrator to reflect actual reductions that are verified in accordance with—

(A) regulations promulgated under section 101(c)(1); and

(B) relevant standards and methods developed under this Act.

(3) CARBON DIOXIDE EQUIVALENTS.—The term “carbon dioxide equivalents” means, for each greenhouse gas, the amount of each such greenhouse gas that makes the same contribution to global warming as one metric ton of carbon dioxide, as determined by the Administrator.

(4) COVERED SECTORS.—The term “covered sectors” means the electric power, transportation, industrial, and commercial sectors, as such terms are used in the Inventory.

(5) COVERED ENTITY.—The term “covered entity” means an entity (including a branch, department, agency, or instrumentality of Federal, State, or local government) that—

(A) owns or controls a source of greenhouse gas emissions in the electric power, industrial, or commercial sector of the United States economy (as defined in the Inventory), refines or imports refined petroleum products for use in transportation, or produces or imports hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride; and

(B) emits, from any single facility owned by the entity, over 10,000 metric tons of greenhouse gas per year, measured in units of carbon dioxide equivalents, or—

(i) refines or imports refined petroleum products that, when combusted, will emit;

(ii) produces or imports hydro­flu­oro­carbons, perfluorocarbons, or sulfur hexafluoride that, when used, will emit; or

(iii) produces or imports other greenhouse gases that, when used, will emit,

over 10,000 metric tons of greenhouse gas per year, measured in units of carbon dioxide equivalents.

(6) DATABASE.—The term “database” means the National Greenhouse Gas Database established under section 101.

(7) DIRECT EMISSIONS.—The term “direct emissions” means greenhouse gas emissions by an entity from a facility that is owned or controlled by that entity.

(8) FACILITY.—The term “facility” means a building, structure, or installation located on any 1 or more contiguous or adjacent properties of an entity in the United States.

(9) GREENHOUSE GAS.—The term “greenhouse gas” means—

(A) carbon dioxide;

(B) methane;

(C) nitrous oxide;

(D) hydrofluorocarbons;

(E) perfluorocarbons; or

(F) sulfur hexafluoride.

(10) INDIRECT EMISSIONS.—The term “indirect emissions” means greenhouse gas emissions that are—

(A) a result of the activities of an entity; but

(B) emitted from a facility owned or controlled by another entity.

(11) INVENTORY.—The term “Inventory” means the Inventory of U.S. Greenhouse Gas Emissions and Sinks, prepared in compliance with the United Nations Framework Convention on Climate Change Decision 3/CP.5.

(12) LEAKAGE.—The term “leakage” means—

(A) an increase in greenhouse gas emissions by one facility or entity caused by a reduction in greenhouse gas emissions by another facility or entity; or

(B) a decrease in sequestration that is caused by an increase in sequestration at another location.

(13) PERMANENCE.—The term “permanence” means the extent to which greenhouse gases that are sequestered will not later be returned to the atmosphere.

(14) REGISTRY.—The term “registry” means the registry of greenhouse gas emission reductions and increases in sequestration established under section 101(b)(2).

(15) SECRETARY.—The term “Secretary” means the Secretary of Commerce.

(16) SEQUESTRATION.—

(A) IN GENERAL.—The term “sequestration” means the long-term capture, separation, isolation, or removal of greenhouse gases from the atmosphere.

(B) INCLUSIONS.—The term “sequestration” includes, as the Administrator determines appropriate for carrying out this Act—

(i) agricultural and conservation practices;

(ii) reforestation;

(iii) forest preservation;

(iv) production of cellulosic biomass crops; and

(v) any other method of long-term capture, separation, isolation, or removal of greenhouse gases from the atmosphere.

(C) EXCLUSIONS.—The term “sequestration” does not include—

(i) any conversion of, or negative impact on, a native ecosystem; or

(ii) any introduction of non-native species.

(17) SOURCE CATEGORY.—The term “source category” means a process or activity that leads to direct emissions of greenhouse gases, as listed in the Inventory.

(18) STATIONARY SOURCE.—The term “stationary source” means any source of greenhouse gas emissions except those emissions resulting directly from an engine for transportation purposes.

SEC. 101. National Greenhouse Gas Database and registry established.

(a) Establishment.—As soon as practicable after the date of enactment of this Act, the Administrator, in coordination with the Secretary, the Secretary of Energy, the Secretary of Agriculture, State governments, and private sector and nongovernmental organizations, shall establish, operate, and maintain a database, to be known as the “National Greenhouse Gas Database”, to collect, verify, and analyze data on greenhouse gas emissions by entities.

(b) National Greenhouse Gas Database components.—The database shall consist of—

(1) an inventory of greenhouse gas emissions; and

(2) a registry of greenhouse gas emission reductions and increases in sequestrations.

(c) Comprehensive system.—

(1) IN GENERAL.—Not later than 2 years after the date of enactment of this Act, the Administrator shall promulgate regulations to implement a comprehensive system for greenhouse gas emissions reporting, inventorying, and reduction and sequestration registration.

(2) REQUIREMENTS.—The Administrator shall ensure, to the maximum extent practicable, that—

(A) the comprehensive system described in paragraph (1) is designed to—

(i) maximize completeness, transparency, and accuracy of data reported; and

(ii) minimize costs incurred by entities in measuring and reporting greenhouse gas emissions, emission reductions, and sequestrations; and

(B) the regulations promulgated under paragraph (1) establish procedures and protocols necessary—

(i) to prevent the double-counting of greenhouse gas emissions, emission reductions, or sequestrations reported by more than 1 reporting entity;

(ii) to provide for corrections to errors in data submitted to the database;

(iii) to provide for adjustment to data by reporting entities that have had a significant organizational change (including mergers, acquisitions, and divestiture), in order to maintain comparability among data in the database over time;

(iv) to provide for adjustments to reflect new technologies or methods for measuring or calculating greenhouse gas emissions, emission reductions, or sequestrations;

(v) to account for changes in registration of ownership of emission reductions or increases in sequestration resulting from a voluntary private transaction between reporting entities;

(vi) to prevent a covered entity from avoiding the requirements of this Act by reorganization into multiple entities that are under common control; and

(vii) to clarify the responsibility for reporting in the case of any facility owned or controlled by more than 1 entity.

(3) SERIAL NUMBERS.—Through regulations promulgated under paragraph (1), the Administrator shall develop and implement a system that provides—

(A) for the provision of unique serial numbers to identify the registered emission reductions or increases in sequestration made by an entity;

(B) for the tracking of the registered reductions or sequestrations associated with the serial numbers; and

(C) for such action as may be necessary to prevent counterfeiting of the registered reductions or sequestrations.

SEC. 102. Inventory of greenhouse gas emissions for covered entities.

(a) In general.—Not later than July 1st of each calendar year after 2011, each covered entity shall submit to the Administrator a report that states, for the preceding calendar year, the entity-wide greenhouse gas emissions in the United States (as reported at the facility level), including—

(1) the total quantity of direct emissions from stationary sources, including process and fugitive emissions, expressed in units of carbon dioxide equivalents, except those reported under paragraph (3);

(2) the amount of petroleum products refined or refined petroleum products imported by the entity for use in transportation and the amount of greenhouse gases, expressed in units of carbon dioxide equivalents, that would be emitted when these products are used for transportation, as determined by the Administrator under section 121(b);

(3) the amount of hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride, expressed in units of carbon dioxide equivalents, that are produced or imported by the entity and will ultimately be emitted in the United States, as determined by the Administrator under section 121(d); and

(4) such other categories of greenhouse gas emissions in the United States as the Administrator determines in the regulations promulgated under section 101(c)(1) may be practicable and useful for the purposes of this Act, such as indirect emissions.

(b) Collection and analysis of data.—The Administrator shall collect and analyze data reported under subsection (a) for use under this title.

SEC. 103. Greenhouse gas reduction registration.

(a) In general.—Subject to the requirements described in subsection (b)—

(1) a covered entity may register greenhouse gas emission reductions and increases in sequestration achieved after 1990 and before 2012 under this section; and

(2) an entity that is not a covered entity may register greenhouse gas emission reductions and increases in sequestration achieved at any time since 1990 under this section.

(b) Requirements.—

(1) IN GENERAL.—The requirements referred to in subsection (a) are that an entity (other than an entity described in paragraph (2)) shall—

(A) establish a baseline; and

(B) submit the report described in section 102(a)(1).

(2) REQUIREMENTS NOT APPLICABLE TO ENTITIES ENTERING INTO CERTAIN AGREEMENTS.—An entity that enters into an agreement with a participant in the registry for the purpose of a carbon sequestration project may register greenhouse gas emission reductions or sequestrations without being required to comply with the requirements specified in paragraph (1), unless that entity is required to comply with those requirements by reason of an activity other than the agreement.

(c) Procedure.—

(1) VOLUNTARY REPORTING.—An entity described in subsection (a) may submit to the Administrator for inclusion in the registry—

(A) before January 1, 2012, data that relates to any activity that resulted in the net reduction of the greenhouse gas emissions of the entity or an increase in sequestration by the entity that were carried out during or after 1990 and before the establishment of the database; and

(B) with respect to the calendar year preceding the calendar year in which the data is submitted, data that relates to any project or activity that resulted in the net reduction of the greenhouse gas emissions of the entity or a net increase in net sequestration by the entity.

(2) PROVISION OF VERIFICATION INFORMATION BY REPORTING ENTITIES.—Each entity that submits a report under section 102(a) or this subsection shall provide information sufficient for the Administrator to verify, in accordance with measurement and verification methods and standards developed under section 104, that the report—

(A) has been accurately reported; and

(B) in the case of each voluntary report under paragraph (1), represents—

(i) actual reductions in greenhouse gas emissions relative to historic emission levels of the entity; or

(ii) actual increases in net sequestration.

(3) FAILURE TO SUBMIT REPORT.—An entity that submits data for registration of emission reductions or increases in sequestration in the registry and that fails to submit a report required under this subsection shall be prohibited from using, or allowing another entity to use, its registered emissions reductions or increases in sequestration to satisfy the requirements of section 121.

(4) INDEPENDENT THIRD-PARTY VERIFICATION.—To meet the requirements of this section and section 104, an entity that submits a report under this section may—

(A) obtain independent third-party verification; and

(B) present the results of the third-party verification to the Administrator.

(5) AVAILABILITY OF DATA.—

(A) IN GENERAL.—The Administrator shall ensure that information in the database is—

(i) published; and

(ii) accessible to the public, including in electronic format on the Internet.

(B) EXCEPTION.—Subparagraph (A) shall not apply in any case in which the Administrator determines that publishing or otherwise making available information described in that subparagraph—

(i) poses a risk to national security; or

(ii) discloses confidential business information that can not be derived from information that is otherwise publicly available and that would cause competitive harm if published.

(6) DATA INFRASTRUCTURE.—The Administrator shall ensure, to the maximum extent practicable, that the database uses, and is integrated with, Federal, State, and regional greenhouse gas data collection and reporting systems.

(7) ADDITIONAL ISSUES TO BE CONSIDERED.—In promulgating the regulations under section 101(c)(1) and implementing the database, the Administrator shall take into consideration a broad range of issues involved in establishing an effective database, including—

(A) the data and information systems and measures necessary to identify, track, and verify greenhouse gas emissions in a manner that will encourage private sector trading and exchanges;

(B) the greenhouse gas reduction and sequestration measurement and estimation methods and standards applied in other countries, as applicable or relevant;

(C) the extent to which available data on fossil fuels, greenhouse gas emissions, and greenhouse gas production, refining, and importation are adequate to implement the database; and

(D) the differences in, and potential uniqueness of, the facilities, operations, and business and other relevant practices of persons and entities in the private and public sectors that may be expected to participate in the database.

(d) Annual report.—The Administrator shall publish an annual report that—

(1) describes the total greenhouse gas emissions, emission reductions, and increases in sequestration reported to the database during the year covered by the report;

(2) provides entity-by-entity and sector-by-sector analyses of the emissions, emission reductions, and increases in sequestration reported;

(3) describes the atmospheric concentrations of greenhouse gases;

(4) provides a comparison of current and past atmospheric concentrations of greenhouse gases; and

(5) describes the activity during the year covered by the report in the trading of greenhouse gas emission allowances.

SEC. 104. Measurement and verification.

(a) Methods and standards.—

(1) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the Administrator shall establish by rule, in coordination with the Secretary, the Secretary of Energy, and the Secretary of Agriculture, comprehensive measurement and verification methods and standards to ensure a consistent and technically accurate record of greenhouse gas emissions, emission reductions, sequestration, and atmospheric concentrations for use in the registry.

(2) REQUIREMENTS.—The methods and standards established under paragraph (1) shall include—

(A) a requirement that an entity submitting data for the database use a continuous emissions monitoring system, or another system of measuring emissions, emission reductions, or increases in sequestration that is determined by the Administrator to provide information with precision, reliability, accessibility, and timeliness similar to that provided by a continuous emissions monitoring system where technologically feasible;

(B) establishment of standardized measurement and verification practices for reports made by all entities participating in the registry, taking into account—

(i) protocols and standards in use by entities requiring or desiring to participate in the registry as of the date of development of the methods and standards under paragraph (1);

(ii) boundary issues, such as leakage;

(iii) avoidance of double counting of greenhouse gas emissions, emission reductions, and increases in sequestration; and

(iv) such other factors as the Administrator, in consultation with the Secretary, the Secretary of Energy, and the Secretary of Agriculture, determines to be appropriate;

(C) establishment of methods of—

(i) estimating greenhouse gas emissions, for those cases in which the Administrator determines that methods of monitoring or measuring such emissions with precision, reliability, accessibility, and timeliness similar to that provided by a continuous emissions monitoring system are not technologically feasible at present; and

(ii) reporting the accuracy of such estimations;

(D) establishment of measurement and verification standards applicable to actions taken to reduce or sequester greenhouse gas emissions;

(E) in coordination with the Secretary of Agriculture, standards to measure the results of the use of carbon sequestration, including—

(i) soil carbon sequestration practices;

(ii) forest preservation and reforestation activities that adequately address the issues of permanence, leakage, and verification; and

(iii) production of cellulosic biomass crops;

(F) establishment of standards for obtaining the Administrator’s approval of the suitability of geological storage sites that include evaluation of both the geology of the site and the entity’s capacity to manage the site;

(G) establishment of other features that, as determined by the Administrator, will allow entities to adequately establish a fair and reliable measurement and reporting system; and

(H) establishment of such other measurement and verification standards as the Administrator, in consultation with the Secretary of Agriculture, the Secretary, and the Secretary of Energy, determines to be appropriate.

(b) Public participation.—The Administrator shall make available to the public for comment, in draft form and for a period of at least 90 days, the methods and standards developed under subsection (a) before issuing final regulations under this section.

(c) Experts and consultants.—

(1) IN GENERAL.—The Administrator may obtain the services of experts and consultants in the private and nonprofit sectors for the purpose of carrying out this section in accordance with section 3109 of title 5, United States Code, in the areas of greenhouse gas measurement, certification, and emission trading.

(2) AVAILABLE ARRANGEMENTS.—In obtaining any service described in paragraph (1), the Administrator may use any available grant, contract, cooperative agreement, or other arrangement authorized by law.

(d) Review and revision.—The Administrator shall periodically review, and revise as necessary, the methods and standards developed under subsection (a).

SEC. 121. Covered entities must submit allowances for emissions.

(a) In general.—Beginning with calendar year 2012—

(1) each covered entity in the electric power, industrial, and commercial sectors shall submit to the Administrator one tradeable allowance for every metric ton of greenhouse gases, measured in units of carbon dioxide equivalents, that it emits from stationary sources, except those described in paragraph (2);

(2) each producer or importer of hydro­fluorocarbons, perfluorocarbons, or sulfur hexa­fluoride that is a covered entity shall submit to the Administrator one tradeable allowance for every metric ton of hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride, measured in units of carbon dioxide equivalents, that it produces or imports and that are deemed under subsection (d) to be emitted in the United States; and

(3) each petroleum product refiner or importer that is a covered entity shall submit one tradeable allowance for every unit of petroleum product it sells that will produce one metric ton of greenhouse gases when used for transportation, measured in units of carbon dioxide equivalents, as determined by the Administrator under subsection (b).

(b) Determination of Transportation sector amount.—For the transportation sector, the Administrator shall determine the amount of greenhouse gases, measured in units of carbon dioxide equivalents, that will be deemed to be emitted when petroleum products are used for transportation.

(c) Exception for certain deposited emissions.—Notwithstanding subsection (a), a covered entity is not required to submit a tradeable allowance for any amount of greenhouse gas that would otherwise have been emitted from a facility under the ownership or control of that entity if—

(1) the emission is deposited in a geological storage facility approved by the Administrator described in section 104(a)(2)(F); and

(2) the entity agrees to submit tradeable allowances for any portion of the deposited emission that is subsequently emitted from that facility.

(d) Determination of hydrofluorocarbon, perfluorocarbon, and sulfur hexafluoride amount.—The Administrator shall determine the amounts of hydrofluorocarbons, perfluorocarbons, or sulfur hexafluoride, measured in units of carbon dioxide equivalents, that will be deemed to be emitted for purposes of this Act.

(e) Allowances retired.—Upon receiving a tradeable allowance pursuant to a requirement under this subtitle, the Administrator shall retire the serial number assigned to that allowance.

SEC. 122. Compliance.

(a) Source of tradeable allowances used.—A covered entity may use a tradeable allowance to meet the requirements of this subtitle without regard to whether the tradeable allowance was allocated to it under subtitle D or acquired from another entity or the Climate Change Credit Corporation established under section 201.

(b) Verification by Administrator.—At various times during each year, the Administrator shall determine whether each covered entity has met the requirements of this subtitle. In making that determination, the Administrator shall take into account the tradeable allowances submitted by the covered entity to the Administrator.

SEC. 123. Exemption of source categories.

(a) In general.—The Administrator may grant an exemption from the requirements of this subtitle to a source category if the Administrator determines, after public notice and comment, that it is not feasible to measure or estimate emissions from that source category, until such time as measurement or estimation becomes feasible.

(b) Reduction of limitations.—If the Administrator exempts a source category under subsection (a), the Administrator shall also reduce the total tradeable allowances under section 124(a)(1), (2), (3), or (4), as applicable, by the amount of greenhouse gas emissions that the exempted source category emitted in calendar year 2000, as identified in the 2000 Inventory.

(c) Limitation on exemption.—The Administrator may not grant an exemption under subsection (a) to carbon dioxide produced from fossil fuel.

SEC. 124. Establishment of tradeable allowances.

(a) In general.—The Administrator shall promulgate regulations to establish tradeable allowances, denominated in units of carbon dioxide equivalents, as follows:

(1) For the first 8 calendar years beginning after 2011, the number of tradeable allowances shall be equal to 6,150 million metric tons, measured in units of carbon dioxide equivalents, reduced by the amount of emissions of greenhouse gases in calendar year 2012 from non-covered entities, as calculated by the Administrator.

(2) For the first 10 calendar years beginning after 2019, the number of tradeable allowances shall be equal to 5,232 million metric tons, measured in units of carbon dioxide equivalents, reduced by the amount of emissions of greenhouse gases in calendar year 2020 from non-covered entities, as calculated by the Administrator.

(3) For the first 10 calendar years beginning after 2029, the number of tradeable allowances shall be equal to 3,858 million metric tons, measured in units of carbon dioxide equivalents, reduced by the amount of emissions of greenhouse gases in calendar year 2030 from non-covered entities, as calculated by the Administrator.

(4) For calendar years beginning after 2049, the number of tradeable allowances shall be equal to 1,504 million metric tons, measured in units of carbon dioxide equivalents, reduced by the amount of emissions of greenhouse gases in each such calendar year from non-covered entities, as calculated by the Administrator.

(b) Serial numbers.—The Administrator shall assign a unique serial number to each tradeable allowance established under subsection (a), and shall take such action as may be necessary to prevent counterfeiting of tradeable allowances.

(c) Nature of tradeable allowances.—A tradeable allowance is not a property right, and nothing in this title or any other provision of law limits the authority of the United States to terminate or limit a tradeable allowance.

(d) Non-covered entity.—For purposes of this section only, the term “non-covered entity” means an entity that—

(1) owns or controls a source of greenhouse gas emissions in the electric power, industrial, or commercial sector of the United States economy (as defined in the Inventory), refines or imports refined petroleum products for use in transportation, or produces or imports hydrofluorocarbons, per­fluoro­car­bons, or sulfur hexafluoride; and

(2) is not a covered entity.

SEC. 125. Penalties.

Any covered entity that fails to meet the requirements of this subtitle for a year shall be liable for a civil penalty, payable to the Administrator, equal to thrice the market value (determined as of the last day of the year at issue) of the tradeable allowances that would be necessary for that covered entity to meet those requirements on the date that the tradeable allowances were due.

SEC. 141. Trading.

(a) In general.—Tradeable allowances may be sold, exchanged, purchased, retired, or used as provided in this Act.

(b) Intersector trading.—Covered entities may purchase or otherwise acquire tradeable allowances from other covered sectors to satisfy the requirements of this title, in addition to those from within their own sector.

SEC. 142. Banking.

Tradeable allowances not used to satisfy the requirements of this title in a year may be used to satisfy the requirements in a later year.

SEC. 143. Borrowing against future reductions.

(a) In general.—The Administrator shall establish a program under which a covered entity may—

(1) receive a credit in the current calendar year for anticipated reductions in emissions in a future calendar year; and

(2) use the credit in lieu of a tradeable allowance to meet the requirements of this title for the current calendar year, subject to the limitation imposed by subsection (b).

(b) Determination of tradeable allowance credits.—The Administrator may make credits available under subsection (a) only for anticipated reductions in emissions that—

(1) are attributable to the realization of capital investments in equipment, the construction, reconstruction, or acquisition of facilities, or the deployment of new technologies—

(A) for which the covered entity has executed a binding contract and secured, or applied for, all necessary permits and operating or implementation authority;

(B) that will not become operational within the current calendar year; and

(C) that will become operational and begin to reduce emissions from the covered entity within 5 years after the year in which the credit is used; and

(2) will be realized within 5 years after the year in which the credit is used.

(c) Carrying cost.—If a covered entity uses a credit under this section to meet the requirements of this title for a calendar year (in this subsection referred to as the use year), the tradeable allowance requirement for the year from which the credit was taken (in this subsection referred to as the source year) shall be increased by an amount equal to—

(1) 10 percent for each credit borrowed from the source year; multiplied by

(2) the number of years after the use year that the source year occurs.

(d) Maximum borrowing period.—A credit from a year beginning more than 5 years after the current year may not be used to meet the requirements of this title for the current year.

(e) Failure To achieve reductions generating credit.—If a covered entity that uses a credit under this section fails to achieve the anticipated reduction for which the credit was granted for the year from which the credit was taken, then—

(1) the covered entity’s requirements under this Act for that year shall be increased by the amount of the credit, plus the amount determined under subsection (c);

(2) any tradeable allowances submitted by the covered entity for that year shall be counted first against the increase in those requirements; and

(3) the covered entity may not use credits under this section to meet the increased requirements.

SEC. 144. Domestic offsets.

(a) Alternative means of compliance.—A covered entity may satisfy up to 15 percent of its total allowance submission requirement under section 121 by any combination of the following:

(1) Submitting tradeable allowances from another nation’s market in greenhouse gas emissions if—

(A) the Administrator determines that the other nation’s system for trading in greenhouse gas emissions is complete, accurate, and transparent and reviews that determination at least once every 5 years;

(B) the other nation has adopted enforceable limits on its greenhouse gas emissions which the tradeable allowances were issued to implement; and

(C) the covered entity certifies that the tradeable allowance has been retired unused in the other nation’s market.

(2) Submitting a registered net increase in sequestration, as registered in the database, adjusted, if necessary, to comply with the accounting standards and methods described in subsection (c). An increase in sequestration submitted under this paragraph need not have been registered by the covered entity submitting it.

(3) Submitting a greenhouse gas emissions reduction (other than a registered net increase in sequestration) that was registered in the database by a person that is not a covered entity.

(4) Submitting credits obtained by the submitting covered entity from the Administrator under section 143 or section 145.

(b) Dedicated program for sequestration in agricultural soils.—If a covered entity satisfies a full 15 percent of its total allowance submission requirements pursuant to subsection (a), it shall satisfy up to 1.5 percent of its total allowance submission requirement by submitting registered net increases in sequestration in agricultural soils, as registered in the database, adjusted, if necessary, to comply with the accounting standards and methods described in subsection (c).

(c) Sequestration accounting.—

(1) SEQUESTRATION ACCOUNTING.—If a covered entity uses a registered net increase in sequestration to satisfy the requirements of section 121 for any year, that covered entity shall submit information to the Administrator every 5 years thereafter sufficient to allow the Administrator to determine, using the methods and standards created under section 104, whether that net increase in sequestration still exists. The covered entity shall offset any loss of sequestration by submitting additional tradeable allowances of equivalent amount in the calender year following that determination.

(2) REGULATIONS REQUIRED.—The Administrator, in coordination with the Secretary of Agriculture, the Secretary of Energy, and the Secretary, shall issue regulations establishing the sequestration accounting rules for all classes of sequestration projects.

(3) CRITERIA FOR REGULATIONS.—In issuing regulations under this subsection, the Administrator shall use the following criteria:

(A) If the range of possible amounts of net increase in sequestration for a particular class of sequestration project is not more than 10 percent of the median of that range, the amount of sequestration credited shall be equal to the median value of that range.

(B) If the range of possible amounts of net increase in sequestration for a particular class of sequestration project is more than 10 percent of the median of that range, the amount of sequestration awarded shall be equal to the fifth percentile of that range.

(C) The regulations shall include procedures for accounting for potential leakage from sequestration projects and for ensuring that any registered increase in sequestration is in addition that which would have occurred if this Act had not been enacted.

(4) UPDATES.—The Administrator shall update the sequestration accounting rules for every class of sequestration project at least once every 5 years.

SEC. 145. International credits plan.

(a) Establishment.—The Administrator shall establish a program the purposes of which are—

(1) to assist developing countries in achieving sustainable development and in contributing to the objective of reducing the greenhouse gas emissions; and

(2) to assist covered entities in achieving compliance with the requirements of section 121.

(b) Program Components.—

(1) IN GENERAL.—The program shall provide for the earning of tradable allowances by covered entities from project activities in developing countries resulting in certified emission reductions. The Administrator shall ensure tradability of emission reductions earned under this program with reductions earned under other similar international programs.

(2) APPROVAL CRITERIA AND REVIEW PROCESS.—By no later than 2011, the Administrator shall—

(A) develop criteria for the approval of projects submitted for review; and

(B) establish a review process for submitted projects that includes a procedure for providing the results of the review, together with an explanation of the reasons for approving or denying approval of a submitted project, to the entity that submitted the project.

(3) FEES.—The Administrator may charge an application fee for the review of project proposals to cover the administrative costs of the program.

(4) CERTIFICATION OF RESULTS REQUIRED.—The Administrator shall require entities participating in this program to obtain independent third-party verification that—

(A) participation by all parties involved in the project is voluntary; and

(B) the project produces—

(i) real, measurable, and long-term benefits related to the mitigation of climate change; and

(ii) reductions in emissions that are additional to any that would occur in the absence of the certified project activity.

(c) Use of allowances.—Subject to the limitation in section 144(a), tradable allowances earned under the program may be used to meet the requirements of section 121.

(d) Study.—Within 3 years after the date of enactment of this Act, the Administrator, in coordination with the Secretary, shall conduct a study of the impacts of the compliance cost reduction measures of this section and section 144 on achieving the purposes of this Act. The Administrator shall submit the results of the study to the Congress along with any recommendations the Administrator considers appropriate.

SEC. 161. Determination of tradeable allowance allocations.

(a) In general.—The Administrator shall annually determine—

(1) the amount of tradeable allowances to be allocated to each covered sector; and

(2) the amount of tradeable allowances to be allocated to the Climate Change Credit Corporation established under section 201.

(b) Allocation factors.—In making the determination required by subsection (a), the Administrator shall consider—

(1) the distributive effect of the allocations on household income and net worth of individuals;

(2) the impact of the allocations on corporate income, taxes, and asset value;

(3) the impact of the allocations on income levels of consumers and on their energy consumption;

(4) the effects of the allocations in terms of economic efficiency;

(5) the ability of covered entities to pass through compliance costs to their customers;

(6) the degree to which the amount of allocations to the covered sectors should decrease over time;

(7) the need to maintain the international competitiveness of United States manufacturing and avoid the additional loss of United States manufacturing jobs; and

(8) the necessary funding levels for the initiatives and programs described in section 202.

(c) Allocation recommendations and implementation.—Not later than 24 months after the date of enactment of this Act, and annually thereafter, the Administrator shall submit the determinations under subsection (a) to the Committee on Commerce, Science, and Transportation and the Committee on Environment and Public Works of the Senate, and to the Committee on Science and Technology and the Committee on Energy and Commerce of the House of Representatives. The Administrator’s determinations under subsection (a)(1), and the allocations and provision of tradeable allowances pursuant to that determination, are deemed to be a major rule (as defined in section 804(2) of title 5, United States Code), and subject to the provisions of chapter 8 of that title.

SEC. 162. Provision of tradeable allowances.

(a) In general.—The Administrator shall, by regulation, establish a process for providing tradeable allowances without cost to covered entities described in subparagraphs (A) and (B)(i) and (ii) of section 3(5) that will—

(1) encourage investments that increase the efficiency of the processes that produce greenhouse gas emissions;

(2) minimize the costs to the Government of providing the tradeable allowances;

(3) give credit to covered entities for emissions reductions made before 2012 and registered with the database; and

(4) provide sufficient tradeable allowances for new entrants into the sector.

(b) Allocation to covered entities in States adopting mandatory greenhouse gas emissions reduction programs.—For a covered entity operating in any State that has adopted a legally binding and enforceable program to achieve and maintain greenhouse gas emission reductions that are consistent with, or more stringent than, reductions mandated by this Act, and which requirements are effective prior to 2012, the Administrator shall consider such binding State actions in making the final determination of allocation to such covered entities.

SEC. 163. Ensuring target adequacy.

(a) In general.—Beginning 2 years after the date of enactment of this Act, the Under Secretary of Commerce for Oceans and Atmosphere shall review the amount of allowances established under section 124 no less frequently than biennially—

(1) to re-evaluate the levels established by that section, after taking into account the best available science and the most currently available data; and

(2) to re-evaluate the environmental and public health impacts of specific concentration levels of greenhouse gases,

to determine whether the amount of those allowances continues to be consistent with the objective of the United Nations’ Framework Convention on Climate Change of stabilizing levels of greenhouse gas emissions at a level that will prevent dangerous anthropogenic interference with the climate system.

(b) Review of 2012 levels.—The Under Secretary shall specifically review in 2010 the level established under section 124(a)(1), and transmit a report on his reviews, together with any recommendations, including legislative recommendations, for modification of the levels, to the Committee on Commerce, Science, and Transportation and the Committee on Environment and Public Works of the Senate, and to the Committee on Science and Technology and the Committee on Energy and Commerce of the House of Representatives.

SEC. 164. Initial allocations for early participation and accelerated participation.

Before providing any tradeable allowances under section 162, the Administrator shall allocate—

(1) to any covered entity an amount of tradeable allowances equivalent to the amount of greenhouse gas emission reductions registered by that covered entity in the database if—

(A) the covered entity has requested to use the registered reduction in the year of allocation;

(B) the reduction was registered prior to 2012; and

(C) the Administrator retires the unique serial number assigned to the reduction under section 101(c)(3); and

(2) to any covered entity that has entered into an accelerated participation agreement under section 165, such tradeable allowances as the Administrator has determined to be appropriate under that section.

SEC. 165. Bonus for accelerated participation.

(a) In general.—If a covered entity executes an agreement with the Administrator under which it agrees to reduce its level of greenhouse gas emissions to a level no greater than the level of its greenhouse gas emissions for calendar year 1990 by the year 2012, then, for the 6-year period beginning with calendar year 2012, the Administrator shall—

(1) provide additional tradeable allowances to that entity when allocating allowances under section 164 in order to recognize the additional emission reductions that will be required of the covered entity;

(2) allow that entity to satisfy 20 percent (in addition to the amount authorized under section 144(a)) of its requirements under section 121 by any combination of—

(A) submitting tradeable allowances from another nation’s market in greenhouse gas emissions under the conditions described in section 144(a)(1);

(B) submitting a registered net increase in sequestration, as registered in the database, adjusted, if necessary, to comply with the accounting standards and methods described in section 144(c); and

(C) submitting a greenhouse gas emission reduction (other than a registered net increase in sequestration) that was registered in the database by a person that is not a covered entity.

(b) Termination.—An entity that executes an agreement described in subsection (a) may terminate the agreement at any time.

(c) Failure To meet commitment.—If an entity that executes an agreement described in subsection (a) fails to achieve the level of emissions to which it committed by calendar year 2012, including through termination under subsection (b)—

(1) its requirements under section 121 shall be increased by the amount of any tradeable allowances provided to it under subsection (a)(1) of this section; and

(2) any tradeable allowances submitted thereafter shall be counted first against the increase in those requirements.

SEC. 201. Establishment.

(a) In general.—The Climate Change Credit Corporation (in this title referred to as the “Corporation”) is established as a nonprofit corporation without stock. The Corporation shall not be considered to be an agency or establishment of the United States Government.

(b) Applicable laws.—The Corporation shall be subject to the provisions of this Act and, to the extent consistent with this Act, to the District of Columbia Business Corporation Act.

(c) Board of directors.—The Corporation shall have a board of directors of 5 individuals who are citizens of the United States, of whom 1 shall be elected annually by the board to serve as chairman. No more than 3 members of the board serving at any time may be affiliated with the same political party. The members of the board shall be appointed by the President of the United States, by and with the advice and consent of the Senate, and shall serve for terms of 5 years.

SEC. 202. Purposes and functions.

(a) Trading.—The Corporation—

(1) shall receive and manage tradeable allowances allocated to it under section 161(a)(2);

(2) shall buy and sell tradeable allowances, whether allocated to it under that section or obtained by purchase, trade, or donation from other entities; and

(3) may not retire tradeable allowances unused.

(b) Use of tradeable allowances and proceeds.—

(1) IN GENERAL.—The Corporation shall use the tradeable allowances, and proceeds derived from its trading activities in tradeable allowances, to reduce costs borne by consumers as a result of the greenhouse gas reduction requirements of this Act. The reductions—

(A) may be obtained by buy-down, subsidy, negotiation of discounts, consumer rebates, or otherwise;

(B) shall be, as nearly as possible, equitably distributed across all regions of the United States; and

(C) may include arrangements for preferential treatment to consumers who can least afford any such increased costs.

(2) TRANSITION ASSISTANCE TO DISLOCATED WORKERS AND COMMUNITIES.—The Corporation shall allocate a percentage of the proceeds derived from its trading activities in tradeable allowances to provide transition assistance to dislocated workers and communities. Transition assistance may take the form of—

(A) grants to employers, employer associations, and representatives of employees—

(i) to provide training, adjustment assistance, and employment services to dislocated workers; and

(ii) to make income-maintenance and needs-related payments to dislocated workers; and

(B) grants to State and local governments to assist communities in attracting new employers or providing essential local government services.

(3) PHASE-OUT OF TRANSITION ASSISTANCE.—The percentage allocated by the Corporation under paragraph (2)—

(A) shall be 20 percent for 2012; and

(B) shall be reduced by 2 percentage points each of the next 10 years thereafter.

(4) TECHNOLOGY DEPLOYMENT PROGRAMS.—The Corporation shall establish and carry out a program, through direct grants, revolving loan programs, or other financial measures, to provide support for the deployment of technology to assist in compliance with this Act by distributing the proceeds from no less than 10 percent of the total allowances allocated to it for each year. The support shall include the following:

(A) COAL GASIFICATION COMBINED-CYCLE AND GEOLOGICAL CARBON STORAGE PROGRAM.—The Corporation shall establish and carry out a program, through direct grants, to provide incentives for the repowering of existing facilities or construction of new facilities producing electricity or other products from coal gasification combined-cycle plants that capture and geologically store at least 90 percent of the carbon dioxide produced at the facility in accordance with requirements established by the Administrator to ensure the permanence of the storage and that such storage will not cause or contribute to significant adverse effects on public health or the environment. The Corporation shall ensure that no less than 20 percent of the funding under this program is distributed to rural electric cooperatives.

(B) AGRICULTURAL PROGRAMS.—The Corporation shall establish and carry out a program, through direct grants, revolving loan programs, or other financial measures, to provide incentives for greenhouse gas emissions reductions or net increases in sequestration on agricultural lands. The program shall include incentives for—

(i) production of wind energy on agricultural lands;

(ii) agricultural management practices that achieve verified, incremental increases in net carbon sequestration, in accordance with the requirements established by the Administrator under section 144(c); and

(iii) production of renewable fuels that, after consideration of the energy needed to produce such fuels, result in a net reduction in greenhouse gas emissions.

(5) ADAPTATION ASSISTANCE FOR FISH AND WILDLIFE HABITAT.—The Corporation shall fund efforts to strengthen and restore habitat that improve the ability of fish and wildlife to adapt successfully to climate change. The Corporation shall deposit the proceeds from no less than 10 percent of the total allowances allocated to it in the wildlife restoration fund subaccount known as the Wildlife Conservation and Restoration Account established under section 3 of the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669b). Amounts deposited in the subaccount under this paragraph shall be available without further appropriation for obligation and expenditure under that Act.

SEC. 301. NOAA report on climate change effects; preparation assistance.

The Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.) is amended by adding at the end the following:

Report on effects of climate change

“Sec. 320. (a) In general.—The Secretary shall report to the Congress not later than 2 years after the date of enactment of this section, and every 5 years thereafter, on the possible and projected impacts of climate change on—

“(1) oceanic and coastal ecosystems, including marine fish and wildlife and their habitat, and the commercial and recreational fisheries and tourism industries associated with them; and

“(2) coastal communities, including private residential and commercial development and public infrastructure in the coastal zone.

“(b) Contents.—Each report under this section shall include information regarding—

“(1) the impacts that may be due to climate change that have occurred as of the date of the submission of the report; and

“(2) the projected future impacts of climate change.

“(c) Impacts.—The impacts reported on under subsection (b) shall include any—

“(1) increases in sea level;

“(2) increases in storm activity and intensity;

“(3) increases in floods, droughts, and other extremes of weather;

“(4) increases in the temperature of the air and the water on oceanic and coastal ecosystems, with a particular focus on vulnerable fisheries and ecosystems; and

“(5) changes in the acidity of the ocean surface associated with an increase in concentration of carbon dioxide in the atmosphere.

Climate change preparation assistance

“Sec. 321. (a) In general.—The Secretary shall provide technical assistance to each coastal State that has an approved coastal zone management plan under this title, to assist such States in preparing persons living within their coastal zones to adapt to climate change.

“(b) Identification of affected areas and adaptations.—In carrying out this section, the Secretary shall—

“(1) identify the projected impacts of climate change to which persons located in coastal zones may need to adapt, including—

“(A) increases in sea level;

“(B) increases in storm activity and intensity; and

“(C) increases in floods, droughts, and other extremes of weather;

“(2) identify the specific coastal areas of the United States, and the public and private development in coastal communities and the natural resources of the coastal zone, that are vulnerable to the impacts identified under paragraph (1);

“(3) identify the various adaptation measures that may be used to protect the areas and resources identified under paragraph (2) from the impacts identified under paragraph (1); and

“(4) estimate the costs of the adaptation measures identified under paragraph (3).”.

SEC. 302. Adaptation technologies.

(a) In General.—The Director of the Office of Science and Technology Policy shall establish a program on adaptation technologies as part of the Climate Technology Challenge Program. The Director shall perform an assessment of the climate change technological needs of various regions of the country. This assessment shall be provided to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science and Technology of the House of Representatives within 6 months after the date of enactment of this Act.

(b) Regional Estimates.—The Director of the Office of Science and Technology Policy, in consultation with the Secretaries of Transportation, Homeland Security, Agriculture, Housing and Urban Development, Health and Human Services, Defense, Interior, Energy, and Commerce, the Administrator of the Environmental Protection Agency, the Director of United States Geological Survey, and other such Federal offices as the Director considers necessary, along with relevant State agencies, shall perform 6 regional infrastructure cost assessments covering the United States, and a national cost assessment, to provide estimates of the range of costs that should be anticipated for adaptation to the impacts of climate change. The Director shall develop those estimates for low, medium, and high probabilities of climate change and its potential impacts. The assessments shall be provided to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science and Technology of the House of Representatives within 1 year after the date of enactment of this Act.

(c) Adaptation Plan.—

(1) IN GENERAL.—Within 6 months after the date of enactment of this Act, the Secretary of Commerce shall submit a climate change adaptation plan for the United States to the Congress. The adaptation plan shall be based upon assessments performed by the United Nations Intergovernmental Panel on Climate Change, those as required by the 1990 Global Change Research Act, and any other scientific peer-reviewed regional assessments.

(2) REQUIRED COMPONENTS.—The adaptation plan shall include—

(A) a prioritized list of vulnerable systems and regions;

(B) coordination requirements between Federal, State, and local governments to ensure that key public infrastructure, safety, health, and land use planning and control issues are addressed;

(C) coordination requirements among the Federal Government, industry, and communities;

(D) an assessment of climate change science research needs including probabilistic assessments as an aid to planning;

(E) an assessment of climate change technology needs; and

(F) regional and national costs assessments for the range of costs that should be anticipated for adapting to the impacts of climate change.

SEC. 303. Mitigating climate change’s impacts on the poor.

(a) In General.—The Secretary shall conduct research on the impact of climate change on low-income populations everywhere in the world. The research shall—

(1) include an assessment of the adverse impact of climate change on low-income populations in the United States and on developing countries;

(2) identify appropriate climate change adaptation measures and programs for developing countries and low-income populations and assess the impact of those measures and programs on low-income populations;

(3) identify appropriate climate change mitigation strategies and programs for developing countries and low-income populations and assess the impact of those strategies and programs on developing countries and on low-income populations in the United States; and

(4) include an estimate of the costs of developing and implementing those climate change adaptation and mitigation programs.

(b) Report.—Within 1 year after the date of enactment of this Act, the Secretary shall transmit a report on the research conducted under subsection (a) to the Committee on Commerce, Science, and Transportation and the Committee on Environment and Public Works of the Senate, and to the Committee on Science and Technology and the Committee on Energy and Commerce of the House of Representatives.

(c) Authorization of Appropriations.—There are authorized to be appropriated to the Secretary $2,000,000 to carry out the research required by subsection (a).

SEC. 304. Wildlife conservation.

(a) Funding for climate change impact mitigation planning.—Section 3(c) of the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669b(c)) is amended by adding at the end the following:

“(4) CLIMATE CHANGE IMPACT MITIGATION PLANS.—Amounts deposited in the Wildlife Conservation and Restoration Account under section 202(b)(5) of the Climate Stewardship Act of 2007—

“(A) may be used by States to provide relevant information, training, monitoring, and other assistance to develop climate change impact mitigation plans and integrate them into State Comprehensive Wildlife Conservation Strategies; and

“(B) shall be used by States to implement climate change impact mitigation plans integrated into Comprehensive Wildlife Conservation Strategies.”.

(b) Conforming amendment.—Section 3(a)(2) of the Pittman-Robertson Wildlife Restoration Act (16 U.S.C. 669b(a)(2)) is amended in the second sentence by inserting “(in addition to amounts deposited under section 202(b)(5) of the Climate Stewardship Act of 2007)” after “Wildlife Conservation and Restoration Account”.