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CREW: Council On Environmental Quality: Global Warming Documents: CEQ 007622 - CEQ 007631 Re Kameron Phil
CREW: Council On Environmental Quality: Global Warming Documents: CEQ 007622 - CEQ 007631 Re Kameron Phil
CREW: Council On Environmental Quality: Global Warming Documents: CEQ 007622 - CEQ 007631 Re Kameron Phil
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10/05/2001 05:33:08 PM
Subject: Kameron/Phll:
Kameron/Phil:
I also have the testimony of Chris Risbruidt of the Forest Service on 5.820. However, I only have It in
hard copy and would need to fax It to you. Could I get your fax number? '
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S. 769
Goals:
Description
Provides for a mechanism to report international forestry and other carbon sequestration
projects;
Forest Service;
The panel can approve carbon sequestration projects into the program, making them
• Owners of land on which projects take place to obtain insurance for the project
from the Overseas Private Investment Corporation;
Requires the Forest Service to develop criteria for prioritizing and evaluating the
Requires that carbon sequestration actions are additional to what would have occurred
Allow for voluntary reporting of current projects in developing countries for potential
future credit;
Does not address the issue of what could happen to the information reported under this
program at some future point;
Requires that criteria be established to address issues related to whether the project is
CEQ 007623
CEQ 007624
S. 765
Description:
Sets limits on credits of50% ofthe investment from the eligible taxpayer for each year.
An overall cap on the program is set at $200 million/year of credits.
Provides for recapture of credits if the taxpayer violates a term or condition ofthe
approval ofthe project, or if the taxpayer adopts a practice that would defeat the purpose
ofthe carbon sequestration program. The percent oftax recaptured declines over time
and disappears after 30 years.
Issues/Questions
• Investments in carbon sequestration projects can be" front-loaded, with much ofthe
investment happening in the first year(s), carbon sequestration benefits may accrue over a
long period. The limitation of credit to 50% of investments in a given year, may
discourage projects with high up-front investments. An amortization schedule for initial
investments might address this problem.
Provides incentives for actions regardless of the availability of future credits for
greenhouse gas offsets;
.Provides incentives for actions internationally that may not be available domestically;
CEQ 007625
S. 785
May be opened to the conservation reserve program or wetlands reserve program at the
Includes, forest preservation, afforestation, soil management, and others. Allows any
conservation practice that is determined by the Secretary to be appropriate for increasing
carbon sequestration. .
Establishes an Advisory Panel to assist the Secretary in carrying out the Act.
C9mpliance provisions provide for repayment of, or adjustments to rental payments and
• The Secretary of Agriculture consults with the Administrator ofEIA in developing forms
to monitor changes, and report to the public on benefits and compliance.
Payments include cost sharing of treatments and rental payments. Rental payments are
determined through submission ~fhids or other mechanisms determined by the Secretary.
• The Secretary can take other environmental factors into account in selecting bids.
• Provides payments that can be specifically linked to the amount of carbon sequestered.
• Linked to carbon sequestration - not available for other agricultural greenhouse gas
CEQ 007626
offsets
• The per acre cap places forestry projects at a disadvantage - these projects may cost more
per acre (given land is being taken out of crop production) but also sequester more carbon
per acre (2-6+ tons/ac)
• The carbon credits are kept separate from other payments - although there are no
provisions for private sector funding of projects.
CEQ 007627
S. 820
Short Title: Forest Resources for the Environment and Economy Act
Description
Requires a report from the Secretary of Agriculture on the quantity of carbon in the
National Forest System, the potential to increase carbon storage on national forest lands,
and the role of forests in the carbon cycle and contributions of US forestry to the global
carbon budget.
Loan funds can be financed by civil penalties collected under section 113 ofthe Clean
Air Act and Section 309 (d) ofthe Federal Water Pollution Control Act without further
appropriation;
• Allows State loan funds to accept and distribute private funds - recognizes that all
reductions in greenhouse gases associated with projects funded by loans are attributable
to the non-Federal entity that provided funding for the loan.
Loans can be used for purchasing and planting trees other costs associated with tree
planting, forest management, monitoring, measurement and verification.
Loans cannot be used to pay for owner labor, the purchase of capital equipment, (or land
rental- implied).
Loans are repaid at the time ofharvest or based on schedules set up by the State, and are
proportional to the percentage decrease in carbon stock.
CEQ 007628
Pros and cons
Requires the development of reporting guidelines, national carbon stock inventories, and
an assessment of opportunities to sequester carbon on Federal lands.
Does not include agricultural carbon sequestration in the cooperative agreement or State
loan programs;
Does not allow loans to be used to pay land rental rates - perhaps the most significant
component of forestry investments;
The values of the loans or cooperative agreements do not appear to be directly linked to
the amount of carbon sequestered by projects;
Does not require annual appropriations - can be funded from civil penalties collected
under the CAA and FWPCA.
CEQ 007629
S. 1255
Description:
The bill is comprised of three titles. Title I establishes a Carbon Advisory Council. Title II of
S.1255 allows establishes a forest carbon program. Title ill establishes a carbon sequestration
program. Titles IT and ill are essentially the same as S. 820 and S. 785.
Title I. Carbon Advisory Council Under Title I, a Carbon Advisory Council is established to:
• advise the Secretary of Energy on developing and updating guidelines for accurate
reporting of greenhouse gas sequestration from soil carbon and forest management
actions;
evaluate the potential effectiveness of the guidelines in verifying carbon inputs and
outputs from various soil carbon and forest management strategies;
estimate the effect of implementing the guidelines on carbon sequestration and storage;
and
Title II. Forest Carbon Program. Under Title IT, the Secretary ofAgriculture may enter into a
cooperative agr~ement with willing landowners to carry out forest carbon activities on private,
state, and Indian tribe land. As part of this program. the Secretary, in collaboration with State
Foresters and representatives of nongovernmental organizations, shall provide assistance to
States to establish a revolving loan program to carry out forest carbon activities on nonindustrial
private forest land. .
• Interest rates that will be established by States and should to encourages participation of
nonindustrial private forest landowne-,;,; ",:. the program and provide a net rate of return of
not more than 3 percent.
The loan obligations should be repaid to States at the time ofharvest ofland covered by
the program or in accordance with a repayment schedule determined by the State. The
obligation should also repaid at a rate proportional to the percentage decrease of carbon
.stock.
CEQ 007630
• The loan agreement shall include provisions that provide for private insurance, or that
release the owner from the financial obligation for any portion of the timber, forest
products, or other biomass that is lost to insects, disease, fire, storm, flood, or other
circumstance beyond the coqtrol ofthe owner; or cannot be harvested because of
restrictions on tree harvesting imposed by the applicable Federal, State, or local
government after the date ofthe loan agreement.
• The loan agreement shall provide that, until the loan is paid in full by the participating
owner or otherwise terminated in accordance with this section, all reductions in
atmospheric greenhouse gases achieved as the result of the loan shall be attributed to any
non-Federal entities that provide funding for the loan (including the State or any other
person or nongovernmental organization that provides funding to the State for the .
issuance of the loan).
Title ill. Carbon Sequestration Program. Under Title ill, the Secretary of Agriculture is allowed
to establish a carbon sequestration program to encourage owners and operators of land to adopt
land management practices which increase carbon sequestration.
• Maximum:
total payments per person ($50,000/year),
rental payments ($20 per acre),
cost-sharing of practices (50% under carbon contract), and
number of acres (20,000,000).
• °
The minimum contract length is 1 years.
Criteria for determining the acceptability of contract offers shall address: forest preservation and
restoration and afforestation; biodiversity enhancement; high-storage crop production; .soil
erosion management; soil fertility restoration; wetland restoration; no-till.farming practices;
conservation buffers; improved cropping systems with winter cover crops; and any other
conservation practices the Secretary determines to be appropriate for increasing carbon
sequestration.
CEQ 007631