| H.R. 2454 |
|
S. 1733 |
| PART D--OFFSETS |
= |
PART D--OFFSETS |
| SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. |
|
SEC. 731. OFFSETS INTEGRITY ADVISORY BOARD. |
| (a) Establishment- Not later than 30 days after the date of enactment of this title, the Administrator shall establish an independent Offsets Integrity Advisory Board. The Advisory Board shall make recommendations to the Administrator for use in promulgating and revising regulations under this part and part E, and for ensuring the overall environmental integrity of the programs established pursuant to those regulations. |
<> |
(a) Establishment- Not later than 30 days after the date of enactment of this title, the President shall establish an independent Offsets Integrity Advisory Board. The Advisory Board shall make recommendations to the President for use in promulgating and revising regulations under this part, and for ensuring the overall environmental integrity of the programs established pursuant to those regulations. |
| (b) Membership- The Advisory Board shall be comprised of at least nine members. Each member shall be qualified by education, training, and experience to evaluate scientific and technical information on matters referred to the Board under this section. The Administrator shall appoint Advisory Board members, including a chair and vice-chair of the Advisory Board. Terms shall be 3 years in length, except for initial terms, which may be up to 5 years in length to allow staggering. Members may be reappointed only once for an additional 3-year term, and such second term may follow directly after a first term. |
|
(b) Membership- The Advisory Board shall be comprised of at least nine members. Each member shall be qualified by education, training, and experience to evaluate scientific and technical information on matters referred to the Board under this section. The President shall appoint Advisory Board members, including a chair and vice-chair of the Advisory Board. Terms shall be 3 years in length, except for initial terms, which may be up to 5 years in length to allow staggering. Members may be reappointed only once for an additional 3-year term, and such second term may follow directly after a first term. |
| (c) Activities- The Advisory Board established pursuant to subsection (a) shall-- |
= |
(c) Activities- The Advisory Board established pursuant to subsection (a) shall-- |
| (1) provide recommendations, not later than 90 days after the Advisory Board's establishment and periodically thereafter, to the Administrator regarding offset project types that should be considered for eligibility under section 733, taking into consideration relevant scientific and other issues, including-- |
<> |
(1) provide recommendations, not later than 90 days after the Advisory Board's establishment and periodically thereafter, to the President regarding offset project types that should be considered for eligibility under section 733, taking into consideration relevant scientific and other issues, including-- |
| (A) the availability of a representative data set for use in developing the activity baseline; |
= |
(A) the availability of a representative data set for use in developing the activity baseline; |
| (B) the potential for accurate quantification of greenhouse gas reduction, avoidance, or sequestration for an offset project type; |
|
(B) the potential for accurate quantification of greenhouse gas reduction, avoidance, or sequestration for an offset project type; |
| (C) the potential level of scientific and measurement uncertainty associated with an offset project type; and |
<> |
(C) the potential level of scientific and measurement uncertainty associated with an offset project type; |
| (D) any beneficial or adverse environmental, public health, welfare, social, economic, or energy effects associated with an offset project type; |
= |
(D) any beneficial or adverse environmental, public health, welfare, social, economic, or energy effects associated with an offset project type; |
| |
<> |
(E) the extent to which, as of the date of submission of the report, the project or activity types within each category-- |
| |
|
(i) are required by law (including a regulation); or |
| |
|
(ii) represent business-as-usual (absent funding from offset credits) practices for a relevant land area, industry sector, or forest, soil or facility type; |
| (2) make available to the Administrator its advice and comments on offset methodologies that should be considered under regulations promulgated with respect to section 734, including methodologies to address the issues of additionality, activity baselines, quantification methods, leakage, uncertainty, permanence, and environmental integrity; |
|
(2) make available to the President its advice and comments on offset methodologies that should be considered under regulations promulgated pursuant to subsection (a) and (b) of section 734, including methodologies to address the issues of additionality, activity baselines, measurement, leakage, uncertainty, permanence, and environmental integrity; |
| (3) make available to the Administrator, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues specific to the issuance of international offset credits under section 743; |
|
(3) make available to the President, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues specific to the issuance of international offset credits under section 744; |
| (4) make available to the Administrator, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues associated with the implementation of part E; |
|
(4) make available to the President, and other relevant Federal agencies, its advice and comments regarding scientific, technical, and methodological issues associated with the implementation of this part; |
| (5) make available to the Administrator its advice and comments on areas in which further knowledge is required to appraise the adequacy of existing, revised, or proposed methodologies for use under this part and part E, and describe the research efforts necessary to provide the required information; and |
|
(5) make available to the President its advice and comments on areas in which further knowledge is required to appraise the adequacy of existing, revised, or proposed methodologies for use under this part, and describe the research efforts necessary to provide the required information; and |
| (6) make available to the Administrator its advice and comments on other ways to improve or safeguard the environmental integrity of programs established under this part and part E. |
|
(6) make available to the President its advice and comments on other ways to improve or safeguard the environmental integrity of programs established under this part. |
| (d) Scientific Review of Offset and Deforestation Reduction Programs- Not later than January 1, 2017, and at 5-year intervals thereafter, the Advisory Board shall submit to the Administrator and make available to the public an analysis of relevant scientific and technical information related to this part and part E. The Advisory Board shall review approved and potential methodologies, scientific studies, offset project monitoring, offset project verification reports, and audits related to this part and part E, and evaluate the net emissions effects of implemented offset projects. The Advisory Board shall recommend changes to offset methodologies, protocols, or project types, or to the overall offset program under this part, to ensure that offset credits issued by the Administrator do not compromise the integrity of the annual emission reductions established under section 703, and to avoid or minimize adverse effects to human health or the environment. |
|
(d) Scientific Review of Offset and Deforestation Reduction Programs- Not later than January 1, 2017, and at five-year intervals thereafter, the Advisory Board shall submit to the President and make available to the public an analysis of relevant scientific and technical information related to this part. The Advisory Board shall review approved and potential methodologies, scientific studies, offset project monitoring, offset project verification reports, and audits related to this part, and evaluate the net emissions effects of implemented offset projects. The Advisory Board shall recommend changes to offset methodologies, protocols, or project types, or to the overall offset program under this part, to ensure that offset credits issued by the President do not compromise the integrity of the annual emission reductions established under section 703, and to avoid or minimize adverse effects to human health or the environment. |
| SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. |
= |
SEC. 732. ESTABLISHMENT OF OFFSETS PROGRAM. |
| (a) Regulations- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with appropriate Federal agencies and taking into consideration the recommendations of the Advisory Board, shall promulgate regulations establishing a program for the issuance of offset credits in accordance with the requirements of this part. The Administrator shall periodically revise these regulations as necessary to meet the requirements of this part. |
<> |
(a) Regulations- Not later than 2 years after the date of enactment of this title, the President, in consultation with appropriate Federal agencies and taking into consideration the recommendations of the Advisory Board, shall promulgate regulations establishing a program for the issuance of offset credits in accordance with the requirements of this part. The President shall periodically revise these regulations as necessary to meet the requirements of this part. |
| (b) Requirements- The regulations described in subsection (a) shall-- |
= |
(b) Requirements- The regulations described in subsection (a) shall-- |
| (1) authorize the issuance of offset credits with respect to qualifying offset projects that result in reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases; |
|
(1) authorize the issuance of offset credits with respect to qualifying offset projects that result in reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases; |
| (2) ensure that such offset credits represent verifiable and additional greenhouse gas emission reductions or avoidance, or increases in sequestration; |
|
(2) ensure that such offset credits represent verifiable and additional greenhouse gas emission reductions or avoidance, or increases in sequestration; |
| (3) ensure that offset credits issued for sequestration offset projects are only issued for greenhouse gas reductions that are permanent; |
|
(3) ensure that offset credits issued for sequestration offset projects are only issued for greenhouse gas reductions that are permanent; |
| (4) provide for the implementation of the requirements of this part; and |
<> |
(4) provide for the implementation of the requirements of this part; |
| (5) include as reductions in greenhouse gases reductions achieved through the destruction of methane and its conversion to carbon dioxide, and reductions achieved through destruction of chlorofluorocarbons or other ozone depleting substances, if permitted by the Administrator under section 619(b)(9) and subject to the conditions specified in section 619(b)(9), based on the carbon dioxide equivalent value of the substance destroyed. |
|
(5) include as reductions in greenhouse gases reductions achieved through the destruction of methane and its conversion to carbon dioxide, and reductions achieved through destruction of chlorofluorocarbons or other ozone depleting substances, if permitted by the President under section 619(b)(9) and subject to the conditions specified in section 619(b)(9), based on the carbon dioxide equivalent value of the substance destroyed; and |
| |
|
(6) establish a process to accept and respond to comments from third parties regarding programs established under this part in a timely manner. |
| (c) Coordination to Minimize Negative Effects- In promulgating and implementing regulations under this part, the Administrator shall act (including by rejecting projects, if necessary) to avoid or minimize, to the maximum extent practicable, adverse effects on human health or the environment resulting from the implementation of offset projects under this part. |
|
(c) Coordination To Minimize Negative Effects- In promulgating and implementing regulations under this part, the President shall act (including by rejecting projects, if necessary) to avoid or minimize, to the maximum extent practicable, adverse effects on human health or the environment resulting from the implementation of offset projects under this part. |
| (d) Offset Registry- The Administrator shall establish within the allowance tracking system established under section 724(d) an Offset Registry for qualifying offset projects and offset credits issued with respect thereto under this part. |
|
(d) Offset Registry- The President shall establish within the allowance tracking system established under section 724(d) an Offset Registry for qualifying offset projects and offset credits issued with respect thereto under this part. |
| (e) Legal Status of Offset Credit- An offset credit does not constitute a property right. |
= |
(e) Legal Status of Offset Credit- An offset credit does not constitute a property right. |
| (f) Fees- The Administrator shall assess fees payable by offset project developers in an amount necessary to cover the administrative costs to the Environmental Protection Agency of carrying out the activities under this part. Amounts collected for such fees shall be available to the Administrator for carrying out the activities under this part to the extent provided in advance in appropriations Acts. |
<> |
(f) Fees- The President shall assess fees payable by offset project developers in an amount necessary to cover the administrative costs and the enforcement costs to the Environmental Protection Agency and the Department of Justice of carrying out the activities under this part. Amounts collected for such fees shall be available to the President and the Attorney General for carrying out the activities under this part to the extent provided in advance in appropriations Acts. |
| SEC. 733. ELIGIBLE PROJECT TYPES. |
= |
SEC. 733. ELIGIBLE PROJECT TYPES. |
| (a) List of Eligible Project Types- |
|
(a) List of Eligible Project Types- |
| (1) IN GENERAL- As part of the regulations promulgated under section 732(a), the Administrator shall establish, and may periodically revise, a list of types of projects eligible to generate offset credits, including international offset credits, under this part. |
<> |
(1) IN GENERAL- As part of the regulations promulgated under section 732(a), the President shall establish, and may periodically revise, a list of types of projects eligible to generate offset credits, including international offset credits, under this part. |
| (2) ADVISORY BOARD RECOMMENDATIONS- In determining the eligibility of project types, the Administrator shall take into consideration the recommendations of the Advisory Board. If a list established under this section differs from the recommendations of the Advisory Board, the regulations promulgated under section 732(a) shall include a justification for the discrepancy. |
|
(2) ADVISORY BOARD RECOMMENDATIONS- In determining the eligibility of project types, the President shall take into consideration the recommendations of the Advisory Board. If a list established under this section differs from the recommendations of the Advisory Board, the regulations promulgated under section 732(a) shall include a justification for the discrepancy. |
| (3) INITIAL DETERMINATION- The Administrator shall establish the initial eligibility list under paragraph (1) not later than 1 year after the date of enactment of this title. The Administrator shall add additional project types to the list not later than 2 years after the date of enactment of this title. In determining the initial list, the Administrator shall give priority to consideration of offset project types that are recommended by the Advisory Board and for which there are well developed methodologies that the Administrator determines would meet the criteria of section 734, with such modifications as the Administrator deems appropriate. In establishing methodologies pursuant to section 734, the Administrator shall give priority to methodologies for offset project types included on the initial eligibility list. |
|
(3) INITIAL DETERMINATION- The President shall establish the initial eligibility list under paragraph (1) not later than one year after the date of enactment of this title for which there are well developed methodologies that the President determines would meet the criteria of section 734. |
| |
|
(4) PROJECT TYPES TO BE CONSIDERED FOR INITIAL LIST- In determining the initial list, the President shall give priority to consideration of offset project types that are recommended by the Advisory Board and for which there are well developed methodologies that the President determines would meet the criteria of section 734, and shall consider-- |
| |
|
(A) methane collection and combustion projects at active underground coal mines; |
| |
|
(B) methane collection and combustion projects at landfills; |
| |
|
(C) capture of venting, flaring, and fugitive emissions from oil and natural gas systems; |
| |
|
(D) nonlandfill methane collection, combustion and avoidance projects involving organic waste streams that would have otherwise emitted methane in the atmosphere, including manure management and biogas capture and combustion; |
| |
|
(E) projects involving afforestation or reforestation of acreage not forested as of January 1, 2009; |
| |
|
(F) forest management resulting in an increase in forest carbon stores, including harvested wood products; |
| |
|
(G) agricultural, grassland, and rangeland sequestration and management practices, including-- |
| |
|
(i) altered tillage practices, including avoided abandonment of such practices; |
| |
|
(ii) winter cover cropping, continuous cropping, and other means to increase biomass returned to soil in lieu of planting followed by fallowing; |
| |
|
(iii) reduction of nitrogen fertilizer use or increase in nitrogen use efficiency; |
| |
|
(iv) reduction in the frequency and duration of flooding of rice paddies; |
| |
|
(v) reduction in carbon emissions from organic soils; |
| |
|
(vi) reduction in greenhouse gas emissions from manure and effluent; |
| |
|
(vii) reduction in greenhouse gas emissions due to changes in animal management practices, including dietary modifications; |
| |
|
(viii) planting and cultivation of permanent tree crops; |
| |
|
(ix) greenhouse gas emission reductions from improvements and upgrades to mobile or stationary equipment (including engines); |
| |
|
(x) practices to reduce and eliminate soil tillage; |
| |
|
(xi) reductions in greenhouse gas emissions through restoration of wetlands, forestland, and grassland; and |
| |
|
(xii) sequestration of greenhouse gases through management of tree crops; and |
| |
|
(H) changes in carbon stocks attributed to land use change and forestry activities, including-- |
| |
|
(i) management of peatland or wetland; |
| |
|
(ii) conservation of grassland and forested land; |
| |
|
(iii) improved forest management, including accounting for carbon stored in wood products; |
| |
|
(iv) reduced deforestation or avoided forest conversion; |
| |
|
(v) urban tree-planting and maintenance; |
| |
|
(vi) agroforestry; and |
| |
|
(vii) adaptation of plant traits or new technologies that increase sequestration by forests. |
| |
|
(5) METHODOLOGIES- In issuing methodologies pursuant to section 734, the President shall give priority to methodologies for offset types included on the initial eligibility list. |
| (b) Modification of List- The Administrator-- |
|
(b) Modification of List- The President-- |
| |
|
(1) shall add additional project types to the list not later than 2 years after the date of enactment of this title; |
| (1) may at any time, by rule, add a project type to the list established under subsection (a) if the Administrator, in consultation with appropriate Federal agencies and taking into consideration the recommendations of the Advisory Board, determines that the project type can generate additional reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases, subject to the requirements of this part; |
|
(2) may at any time, by rule, add a project type to the list established under subsection (a) if the President, in consultation with appropriate Federal agencies and taking into consideration the recommendations of the Advisory Board, determines that the project type can generate additional reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases, subject to the requirements of this part; |
| (2) may at any time, by rule, determine that a project type on the list does not meet the requirements of this part, and remove the project type from the list established under subsection (a), in consultation with appropriate Federal agencies and taking into consideration any recommendations of the Advisory Board; and |
|
(3) may at any time, by rule, determine that a project type on the list does not meet the requirements of this part, and remove a project type from the list established under subsection (a), in consultation with appropriate Federal agencies and taking into consideration any recommendations of the Advisory Board; and |
| (3) shall consider adding to or removing from the list established under subsection (a), at a minimum, project types proposed to the Administrator-- |
|
(4) shall consider adding to or removing from the list established under subsection (a), at a minimum, project types proposed to the President-- |
| (A) by petition pursuant to subsection (c); or |
= |
(A) by petition pursuant to subsection (c); or |
| (B) by the Advisory Board. |
|
(B) by the Advisory Board. |
| (c) Petition Process- Any person may petition the Administrator to modify the list established under subsection (a) by adding or removing a project type pursuant to subsection (b). Any such petition shall include a showing by the petitioner that there is adequate data to establish that the project type does or does not meet the requirements of this part. Not later than 12 months after receipt of such a petition, the Administrator shall either grant or deny the petition and publish a written explanation of the reasons for the Administrator's decision. The Administrator may not deny a petition under this subsection on the basis of inadequate Environmental Protection Agency resources or time for review. |
<> |
(c) Petition Process- Any person may petition the President to modify the list established under subsection (a) by adding or removing a project type pursuant to subsection (b). Any such petition shall include a showing by the petitioner that there is adequate data to establish that the project type does or does not meet the requirements of this part. Not later than 12 months after receipt of such a petition, the President shall either grant or deny the petition and publish a written explanation of the reasons for the President's decision. The President may not deny a petition under this subsection on the basis of inadequate Environmental Protection Agency resources or time for review. |
| SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. |
= |
SEC. 734. REQUIREMENTS FOR OFFSET PROJECTS. |
| (a) Methodologies- As part of the regulations promulgated under section 732(a), the Administrator shall establish, for each type of offset project listed as eligible under section 733, the following: |
<> |
(a) Methodologies- As part of the regulations promulgated under section 732(a), the President shall establish, for each type of offset project listed as eligible under section 733, the following: |
| (1) ADDITIONALITY- A standardized methodology for determining the additionality of greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, achieved by an offset project of that type. Such methodology shall ensure, at a minimum, that any greenhouse gas emission reduction or avoidance, or any greenhouse gas sequestration, is considered additional only to the extent that it results from activities that-- |
= |
(1) ADDITIONALITY- A standardized methodology for determining the additionality of greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, achieved by an offset project of that type. Such methodology shall ensure, at a minimum, that any greenhouse gas emission reduction or avoidance, or any greenhouse gas sequestration, is considered additional only to the extent that it results from activities that-- |
| (A) are not required by or undertaken to comply with any law, including any regulation or consent order; |
|
(A) are not required by or undertaken to comply with any law, including any regulation or consent order; |
| (B) were not commenced prior to January 1, 2009, except in the case of-- |
|
(B) were not commenced prior to January 1, 2009, except in the case of-- |
| (i) offset project activities that commenced after January 1, 2001, and were registered as of the date of enactment of this title under an offset program with respect to which the Administrator has made an affirmative determination under section 740(a)(2); or |
<> |
(i) offset project activities that commenced after January 1, 2001, and were registered as of the date of enactment of this title under an offset program with respect to which the President has made an affirmative determination under section 740(a)(2); or |
| (ii) activities that are readily reversible, with respect to which the Administrator may set an alternative earlier date under this subparagraph that is not earlier than January 1, 2001, where the Administrator determines that setting such an alternative date may produce an environmental benefit by removing an incentive to cease and then reinitiate activities that began prior to January 1, 2009; and |
|
(ii) activities that are readily reversible, with respect to which the President may set an alternative earlier date under this subparagraph that is not earlier than January 1, 2001, where the President determines that setting such an alternative date may produce an environmental benefit by removing an incentive to cease and then reinitiate activities that began prior to January 1, 2009; |
| |
|
(C) are not receiving support under section 323 of division A, or section 207 of division B, of the Clean Energy Jobs and American Power Act; and |
| (C) exceed the activity baseline established under paragraph (2). |
|
(D) exceed the activity baseline established under paragraph (2). |
| (2) ACTIVITY BASELINES- A standardized methodology for establishing activity baselines for offset projects of that type. The Administrator shall set activity baselines to reflect a conservative estimate of business-as-usual performance or practices for the relevant type of activity such that the baseline provides an adequate margin of safety to ensure the environmental integrity of offsets calculated in reference to such baseline. |
|
(2) ACTIVITY BASELINES- A standardized methodology for establishing activity baselines for offset projects of that type. The President shall set activity baselines to reflect a conservative estimate of business-as-usual performance or practices for the relevant type of activity such that the baseline provides an adequate margin of safety to ensure the environmental integrity of offsets calculated in reference to such baseline. |
| (3) QUANTIFICATION METHODS- A standardized methodology for determining the extent to which greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, achieved by an offset project of that type exceed a relevant activity baseline, including protocols for monitoring and accounting for uncertainty. |
= |
(3) QUANTIFICATION METHODS- A standardized methodology for determining the extent to which greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, achieved by an offset project of that type exceed a relevant activity baseline, including protocols for monitoring and accounting for uncertainty. |
| (4) LEAKAGE- A standardized methodology for accounting for and mitigating potential leakage, if any, from an offset project of that type, taking uncertainty into account. |
|
(4) LEAKAGE- A standardized methodology for accounting for and mitigating potential leakage, if any, from an offset project of that type, taking uncertainty into account. |
| (b) Accounting for Reversals- |
|
(b) Accounting for Reversals- |
| (1) IN GENERAL- For each type of sequestration project listed under section 733, the Administrator shall establish requirements to account for and address reversals, including-- |
<> |
(1) IN GENERAL- As part of the regulations promulgated under section 732(a), for each type of sequestration project listed under section 733, the President shall establish requirements to account for and address reversals, including-- |
| (A) a requirement to report any reversal with respect to an offset project for which offset credits have been issued under this part; |
= |
(A) a requirement to report any reversal with respect to an offset project for which offset credits have been issued under this part; |
| (B) provisions to require emission allowances to be held in amounts to fully compensate for greenhouse gas emissions attributable to reversals, and to assign responsibility for holding such emission allowances; and |
<> |
(B) provisions to require emission allowances to be held in amounts to fully compensate for greenhouse gas emissions attributable to reversals, and to assign responsibility for holding such emission allowances; |
| |
|
(C) provisions to discourage repeated intentional reversals by offset project developers, including but not limited to the assessment of administrative fees, temporary suspension, or disqualification of an offset project developer from the program; and |
| (C) any other provisions the Administrator determines necessary to account for and address reversals. |
|
(D) any other provisions the President determines necessary to account for and address reversals. |
| (2) MECHANISMS- The Administrator shall prescribe mechanisms to ensure that any sequestration with respect to which an offset credit is issued under this part results in a permanent net increase in sequestration, and that full account is taken of any actual or potential reversal of such sequestration, with an adequate margin of safety. The Administrator shall prescribe at least one of the following mechanisms to meet the requirements of this paragraph: |
|
(2) MECHANISMS- The President shall prescribe mechanisms to ensure that any sequestration with respect to which an offset credit is issued under this part results in a permanent net increase in sequestration, and that full account is taken of any actual or potential reversal of such sequestration, with an adequate margin of safety. The President shall prescribe at least one of the following mechanisms to meet the requirements of this paragraph: |
| (A) An offsets reserve, pursuant to paragraph (3). |
= |
(A) An offsets reserve, pursuant to paragraph (3). |
| (B) Insurance that provides for purchase and provision to the Administrator for retirement of an amount of offset credits or emission allowances equal in number to the tons of carbon dioxide equivalents of greenhouse gas emissions released due to reversal. |
<> |
(B) Insurance that provides for purchase and provision to the President for retirement of an amount of offset credits or emission allowances equal in number to the tons of carbon dioxide equivalents of greenhouse gas emissions released due to reversal. |
| (C) Another mechanism that the Administrator determines satisfies the requirements of this part. |
|
(C) Another mechanism that the President determines satisfies the requirements of this part. |
| (3) OFFSETS RESERVE- |
= |
(3) OFFSETS RESERVE- |
| (A) IN GENERAL- An offsets reserve referred to in paragraph (2)(A) is a program under which, before issuance of offset credits under this part, the Administrator shall subtract and reserve from the quantity to be issued a quantity of offset credits based on the risk of reversal. The Administrator shall-- |
<> |
(A) IN GENERAL- An offsets reserve referred to in paragraph (2)(A) is a program under which, before issuance of offset credits under this part, the President shall subtract and reserve from the quantity to be issued a quantity of offset credits based on the risk of reversal. The President shall-- |
| (i) hold these reserved offset credits in the offsets reserve; and |
= |
(i) hold these reserved offset credits in the offsets reserve; and |
| (ii) register the holding of the reserved offset credits in the Offset Registry established under section 732(d). |
|
(ii) register the holding of the reserved offset credits in the Offset Registry established under section 732(d). |
| (B) PROJECT REVERSAL- |
|
(B) PROJECT REVERSAL- |
| (i) IN GENERAL- If a reversal has occurred with respect to an offset project for which offset credits are reserved under this paragraph, the Administrator shall retire offset credits or emission allowances from the offsets reserve to fully account for the tons of carbon dioxide equivalent that are no longer sequestered. |
<> |
(i) IN GENERAL- If a reversal has occurred with respect an offset project for which offset credits are reserved under this paragraph, the President shall remove offset credits or emission allowances from the offsets reserve and cancel them to fully account for the tons of carbon dioxide equivalent that are no longer sequestered. |
| (ii) INTENTIONAL REVERSALS- If the Administrator determines that a reversal was intentional, the offset project developer for the relevant offset project shall place into the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to the number of reserve offset credits that were canceled due to the reversal pursuant to clause (i). |
|
(ii) INTENTIONAL REVERSALS- If the President determines that a reversal was intentional, the offset project developer for the relevant offset project shall place into the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to the number of reserve offset credits that were canceled due to the reversal pursuant to clause (i). |
| (iii) UNINTENTIONAL REVERSALS- If the Administrator determines that a reversal was unintentional, the offset project developer for the relevant offset project shall place into the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to half the number of offset credits that were reserved for that offset project, or half the number of reserve offset credits that were canceled due to the reversal pursuant to clause (i), whichever is less. |
|
(iii) UNINTENTIONAL REVERSALS- If the President determines that a reversal was unintentional, the offset project developer for the relevant offset project shall place into the offsets reserve a quantity of offset credits, or combination of offset credits and emission allowances, equal in number to half the number of offset credits that were reserved for that offset project, or half the number of reserve offset credits that were canceled due to the reversal pursuant to clause (i), whichever is less. |
| |
|
(iv) PETITION- Any person may petition the President for a determination that an offsets reversal has occurred. Any such petition shall include a showing by the petitioner that there is adequate data or other evidence to support the petition. Not later than 90 days after the date of receipt of the petition, the President shall take final action determining either that the reversal has occurred or that the reversal has not occurred. Such determination shall be accompanied by a statement of the basis for the determination. |
| (C) USE OF RESERVED OFFSET CREDITS- Offset credits placed into the offsets reserve under this paragraph may not be used to comply with section 722. |
= |
(C) USE OF RESERVED OFFSET CREDITS- Offset credits placed into the offsets reserve under this paragraph may not be used to comply with section 722. |
| |
-+ |
(4) TERM OFFSET CREDITS- |
| |
|
(A) APPLICABILITY- With respect to a practice listed under section 733 that sequesters greenhouse gases and has a crediting period of not more than 5 years, the President may address reversals pursuant to this paragraph in lieu of permanently accounting for reversals pursuant to paragraphs (1) and (2). |
| |
|
(B) ACCOUNTING FOR REVERSALS- For such practices or projects implementing the practices described in subparagraph (A), the President shall require only reversals that occur during the crediting period to be accounted for and addressed pursuant to paragraphs (1) and (2). |
| |
|
(C) CREDITS ISSUED- For practices or projects regulated pursuant to subparagraph (B), the Secretary shall issue under section 737 a term offset credit, in lieu of an offset credit, for each ton of carbon dioxide equivalent that has been sequestered. |
| (c) Crediting Periods- |
= |
(c) Crediting Periods- |
| (1) IN GENERAL- For each offset project type, the Administrator shall specify a crediting period, and establish provisions for petitions for new crediting periods, in accordance with this subsection. |
<> |
(1) IN GENERAL- As part of the regulations promulgated under section 732(a), for each offset project type, the President shall specify a crediting period, and establish provisions for petitions for new crediting periods, in accordance with this subsection. |
| |
|
(2) DURATION- |
| (2) DURATION- The crediting period shall be no less than 5 and no greater than 10 years for any project type other than those involving sequestration. |
|
(A) IN GENERAL- The crediting period shall be not less than 5 and not greater than 10 years for any project type other than those involving sequestration or term offsets. |
| |
|
(B) FORESTRY PROJECTS- The crediting period for a forestry offset project shall not exceed 20 years. |
| |
|
(C) TERM OFFSET CREDITS- The crediting period for a term offset credit issued shall not exceed 5 years. |
| (3) ELIGIBILITY- An offset project shall be eligible to generate offset credits under this part only during the project's crediting period. During such crediting period, the project shall remain eligible to generate offset credits, subject to the methodologies and project type eligibility list that applied as of the date of project approval under section 735, except as provided in paragraph (4) of this subsection. |
|
(3) ELIGIBILITY- An offset project shall be eligible to generate offset credits under this part only during the project's crediting period. During such crediting period, the project shall remain eligible to generate offset credits, subject to the methodologies and project type eligibility list that applied as of the date of project approval under section 735, except as provided in paragraph (4). |
| (4) PETITION FOR NEW CREDITING PERIOD- An offset project developer may petition for a new crediting period to commence after termination of a crediting period, subject to the methodologies and project type eligibility list in effect at the time when such petition is submitted. A petition may not be submitted under this paragraph more than 18 months before the end of the pending crediting period. The Administrator may limit the number of new crediting periods available for projects of particular project types. |
|
(4) PETITION FOR NEW CREDITING PERIOD- An offset project developer may petition for a new crediting period to commence after termination of a crediting period, subject to the methodologies and project type eligibility list in effect at the time when such petition is submitted. A petition may not be submitted under this paragraph more than 18 months before the end of the pending crediting period. The President may grant such petition after public notice and opportunity for comment. The President may limit the number of new crediting periods available for projects of particular project types. |
| (d) Environmental Integrity- In establishing the requirements under this section, the Administrator shall apply conservative assumptions or methods to maximize the certainty that the environmental integrity of the cap established under section 703 is not compromised. |
|
(d) Environmental Integrity- In establishing the requirements under this section, the President shall apply conservative assumptions or methods to maximize the certainty that the environmental integrity of the greenhouse gas limitations established under section 703 is not compromised. |
| (e) Pre-existing Methodologies- In promulgating requirements under this section, the Administrator shall give due consideration to methodologies for offset projects existing as of the date of enactment of this title. |
|
(e) Pre-Existing Methodologies- In promulgating requirements under this section, the President shall give due consideration to methodologies for offset projects existing as of the date of enactment of this title. |
| (f) Added Project Types- The Administrator shall establish methodologies described in subsection (a), and, as applicable, requirements and mechanisms for reversals as described in subsection (b), for any project type that is added to the list pursuant to section 733. |
|
(f) Added Project Types- The President shall establish methodologies described in subsection (a), and, as applicable, requirements and mechanisms for reversals as described in subsection (b), for any project type that is added to the list pursuant to section 733. |
| SEC. 735. APPROVAL OF OFFSET PROJECTS. |
= |
SEC. 735. APPROVAL OF OFFSET PROJECTS. |
| (a) Approval Petition- An offset project developer shall submit an offset project approval petition providing such information as the Administrator requires to determine whether the offset project is eligible for issuance of offset credits under rules promulgated pursuant to this part. |
<> |
(a) Approval Petition- An offset project developer shall submit an offset project approval petition signed by a responsible official (who shall certify the accuracy of the information submitted) and providing such information as the President requires to determine whether the offset project is eligible for issuance of offset credits under rules promulgated pursuant to this part. |
| (b) Timing- An approval petition shall be submitted to the Administrator under subsection (a) no later than the time at which an offset project's first verification report is submitted under section 736. |
|
(b) Timing- An approval petition shall be submitted to the President under subsection (a) not later than the time at which an offset project's first verification report is submitted under section 736. |
| (c) Approval Petition Requirements- As part of the regulations promulgated under section 732, the Administrator shall include provisions for, and shall specify, the required components of an offset project approval petition required under subsection (a), which shall include-- |
|
(c) Approval Petition Requirements- As part of the regulations promulgated under section 732, the President shall include provisions for, and shall specify, the required components of an offset project approval petition required under subsection (a), which shall include-- |
| (1) designation of an offset project developer; and |
|
(1) designation of an offset project developer; |
| |
|
(2) designation of a party who is authorized to provide access to the appropriate officials or an authorized representative to the offset project; and |
| (2) any other information that the Administrator considers to be necessary to achieve the purposes of this part. |
|
(3) any other information that the President considers to be necessary to achieve the purposes of this part. |
| (d) Approval and Notification- Not later than 90 days after receiving a complete approval petition under subsection (a), the Administrator shall make the approval petition publicly available, approve or deny the petition in writing and if the petition is denied, provide the reasons for denial, and make the Administrator's written decision publicly available. After an offset project is approved, the offset project developer shall not be required to resubmit an approval petition during the offset project's crediting period, except as provided in section 734(c)(4). |
|
(d) Approval and Notification- Not later than 90 days after receiving a complete approval petition under subsection (a), the President shall make the approval petition publicly available on the internet, approve or deny the petition in writing, and, if the petition is denied, make the President's decision publicly available on the internet. After an offset project is approved, the offset project developer shall not be required to resubmit an approval petition during the offset project's crediting period, except as provided in section 734(c)(4). |
| (e) Appeal- The Administrator shall establish procedures for appeal and review of determinations made under subsection (d). |
|
(e) Appeal- The President shall establish procedures for appeal and review of determinations made under subsection (d). |
| (f) Voluntary Preapproval Review- The Administrator may establish a voluntary preapproval review procedure, to allow an offset project developer to request the Administrator to conduct a preliminary eligibility review for an offset project. Findings of such reviews shall not be binding upon the Administrator. The voluntary preapproval review procedure-- |
|
(f) Voluntary Preapproval Review- The President may establish a voluntary preapproval review procedure, to allow an offset project developer to request the President to conduct a preliminary eligibility review for an offset project. Findings of such reviews shall not be binding upon the President. The voluntary preapproval review procedure-- |
| (1) shall require the offset project developer to submit such basic project information as the Administrator requires to provide a meaningful review; and |
|
(1) shall require the offset project developer to submit such basic project information as the President requires to provide a meaningful review; and |
| (2) shall require a response from the Administrator not later than 6 weeks after receiving a request for review under this subsection. |
|
(2) shall require a response from the President not later than 6 weeks after receiving a request for review under this subsection. |
| SEC. 736. VERIFICATION OF OFFSET PROJECTS. |
= |
SEC. 736. VERIFICATION OF OFFSET PROJECTS. |
| (a) In General- As part of the regulations promulgated under section 732(a), the Administrator shall establish requirements, including protocols, for verification of the quantity of greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gases, resulting from an offset project. The regulations shall require that an offset project developer shall submit a report, prepared by a third-party verifier accredited under subsection (d), providing such information as the Administrator requires to determine the quantity of greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gases, resulting from the offset project. |
<> |
(a) In General- As part of the regulations promulgated under section 732(a), the President shall establish requirements, including protocols, for verification of the quantity of greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gases, resulting from an offset project. The regulations shall require that an offset project developer shall submit a report, prepared by a third-party verifier accredited under subsection (d), providing such information as the President requires to determine the quantity of greenhouse gas emission reductions or avoidance, or sequestration of greenhouse gas, resulting from the offset project. |
| (b) Schedule- The Administrator shall prescribe a schedule for the submission of verification reports under subsection (a). |
|
(b) Schedule- The President shall prescribe a schedule for the submission of verification reports under subsection (a). |
| (c) Verification Report Requirements- The Administrator shall specify the required components of a verification report required under subsection (a), which shall include-- |
|
(c) Verification Report Requirements- The President shall specify the required components of a verification report required under subsection (a), which shall include-- |
| (1) the name and contact information for a designated representative for the offset project developer; |
= |
(1) the name and contact information for a designated representative for the offset project developer; |
| (2) the quantity of greenhouse gases reduced, avoided, or sequestered; |
<> |
(2) the quantity of greenhouse gas reduced, avoided, or sequestered; |
| (3) the methodologies applicable to the project pursuant to section 734; |
= |
(3) the methodologies applicable to the project pursuant to section 734; |
| (4) a certification that the project meets the applicable requirements; |
|
(4) a certification that the project meets the applicable requirements; |
| (5) a certification establishing that the conflict of interest requirements in the regulations promulgated under subsection (d)(1) have been complied with; and |
|
(5) a certification establishing that the conflict of interest requirements in the regulations promulgated under subsection (d)(1) have been complied with; and |
| (6) any other information that the Administrator considers to be necessary to achieve the purposes of this part. |
<> |
(6) any other information that the President considers to be necessary to achieve the purposes of this part. |
| (d) Verifier Accreditation- |
= |
(d) Verifier Accreditation- |
| (1) IN GENERAL- As part of the regulations promulgated under section 732(a), the Administrator shall establish a process and requirements for periodic accreditation of third-party verifiers to ensure that such verifiers are professionally qualified and have no conflicts of interest. |
<> |
(1) IN GENERAL- As part of the regulations promulgated under section 732(a), the President shall establish a process and requirements for periodic accreditation of third-party verifiers to ensure that such verifiers are professionally qualified and have no conflicts of interest with offset project developers. |
| (2) STANDARDS- |
= |
(2) STANDARDS- |
| (A) AMERICAN NATIONAL STANDARDS INSTITUTE ACCREDITATION- The Administrator may accredit, or accept for purposes of accreditation under this subsection, verifiers accredited under the American National Standards Institute (ANSI) accreditation program in accordance with ISO 14065. The Administrator shall accredit, or accept for accreditation, verifiers under this subparagraph only if the Administrator finds that the American National Standards Institute accreditation program provides sufficient assurance that the requirements of this part will be met. |
<> |
(A) AMERICAN NATIONAL STANDARDS INSTITUTE ACCREDITATION- The President may accredit, or accept for purposes of accreditation under this subsection, verifiers accredited under the American National Standards Institute (ANSI) accreditation program in accordance with ISO 14065. The President shall accredit, or accept for accreditation, verifiers under this subparagraph only if the President finds that the American National Standards Institute accreditation program provides sufficient assurance that the requirements of this part will be met. |
| (B) EPA ACCREDITATION- As part of the regulations promulgated under section 732(a), the Administrator may establish accreditation standards for verifiers under this subsection, and may establish related training and testing programs and requirements. |
|
(B) EPA ACCREDITATION- As part of the regulations promulgated under section 732(a), the President may establish accreditation standards for verifiers under this subsection, and may establish related training and testing programs and requirements. |
| (3) PUBLIC ACCESSIBILITY- Each verifier meeting the requirements for accreditation in accordance with this subsection shall be listed in a publicly accessible database, which shall be maintained and updated by the Administrator. |
|
(3) PUBLIC ACCESSIBILITY- Each verifier meeting the requirements for accreditation in accordance with this subsection shall be listed in a publicly accessible database, which shall be maintained and updated by the President. |
| |
|
(4) REVOCATION- The regulations concerning accreditation of third-party verifiers required under paragraph (1) shall establish a process for the President to revoke the accreditation of any third-party verifier that the President finds fails to maintain professional qualifications or to avoid a conflict of interest, or for other good cause. |
| SEC. 737. ISSUANCE OF OFFSET CREDITS. |
= |
SEC. 737. ISSUANCE OF OFFSET CREDITS. |
| (a) Determination and Notification- Not later than 90 days after receiving a complete verification report under section 736, the Administrator shall-- |
<> |
(a) Determination and Notification- Not later than 90 days after receiving a complete verification report under section 736, the President shall-- |
| (1) make the report publicly available; |
|
(1) make the report publicly available on the Internet; |
| (2) make a determination of the quantity of greenhouse gas emissions that have been reduced or avoided, or greenhouse gases that have been sequestered, by the offset project; and |
|
(2) make a determination of the quantity of greenhouse gas emissions reduced or avoided, or greenhouse gases sequestered, resulting from an offset project approved under section 735; and |
| (3) notify the offset project developer in writing of such determination and make such determination publicly available. |
|
(3) notify the offset project developer in writing of such determination and make such determination publicly available on the Internet. |
| (b) Issuance Of Offset Credits- The Administrator shall issue one offset credit to an offset project developer for each ton of carbon dioxide equivalent that the Administrator has determined has been reduced, avoided, or sequestered during the period covered by a verification report submitted in accordance with section 736, only if-- |
|
(b) Issuance of Offset Credits- The President shall issue one offset credit to an offset project developer for each ton of carbon dioxide equivalent that the President has determined has been reduced, avoided, or sequestered during the period covered by a verification report submitted in accordance with section 736, only if-- |
| (1) the Administrator has approved the offset project pursuant to section 735; and |
|
(1) the President has approved the offset project pursuant to section 735; and |
| (2) the relevant emissions reduction, avoidance, or sequestration has-- |
= |
(2) the relevant emissions reduction, avoidance, or sequestration has-- |
| (A) already occurred, during the offset project's crediting period; and |
|
(A) already occurred, during the offset project's crediting period; and |
| (B) occurred after January 1, 2009. |
|
(B) occurred after January 1, 2009. |
| (c) Appeal- The Administrator shall establish procedures for appeal and review of determinations made under subsection (a). |
<> |
(c) Appeal- The President shall establish procedures for appeal and review of determinations made under subsection (a). |
| (d) Timing- Offset credits meeting the criteria established in subsection (b) shall be issued not later than 2 weeks following the verification determination made by the Administrator under subsection (a). |
|
(d) Timing- Offset credits meeting the criteria established in subsection (b) shall be issued not later than 2 weeks following the verification determination made by the President under subsection (a). |
| (e) Registration- The Administrator shall assign a unique serial number to and register each offset credit to be issued in the Offset Registry established under section 732(d). |
|
(e) Registration- The President shall assign a unique serial number to and register each offset credit to be issued in the Offset Registry established under section 732(d). |
| SEC. 738. AUDITS. |
= |
SEC. 738. AUDITS. |
| (a) In General- The Administrator shall, on an ongoing basis, conduct random audits of offset projects, offset credits, and practices of third-party verifiers. In each year, the Administrator shall conduct audits, at minimum, for a representative sample of project types and geographic areas. |
<> |
(a) In General- The President shall, on an ongoing basis, conduct random audits of offset projects and offset credits. The President shall conduct audits of the practices of third-party verifiers. In each year, the President shall conduct audits, at minimum, for a representative sample of project types and geographic areas. |
| (b) Delegation- The Administrator may delegate to a State or tribal government the responsibility for conducting audits under this section if the Administrator finds that the program proposed by the State or tribal government provides assurances equivalent to those provided by the auditing program of the Administrator, and that the integrity of the offset program under this part will be maintained. Nothing in this subsection shall prevent the Administrator from conducting any audit the Administrator considers necessary and appropriate. |
|
(b) Delegation- The President may delegate to a State or tribal government the responsibility for conducting audits under this section if the President finds that the program proposed by the State or tribal government provides assurances equivalent to those provided by the auditing program of the President, and that the integrity of the offset program under this part will be maintained. Nothing in this subsection shall prevent the President from conducting any audit the President considers necessary and appropriate. |
| |
|
(c) Audit Requirements- As part of the regulations promulgated under section 732(a), the appropriate officials shall establish requirements and protocols for an auditing program, whether undertaken by the appropriate officials or an authorized representative, concerning project developers, third-party verifiers, and various components of the offsets program. Such regulations shall include-- |
| |
|
(1) the components of the offset project, which shall be evaluated against the offset approval petition and the verification report; |
| |
|
(2) the minimum experience or training of the auditors; |
| |
|
(3) the form in which reports shall be completed; |
| |
|
(4) requirements for delegating auditing functions to States or tribal governments, including requiring periodic reports from State or tribal governments on their auditing activities and findings; and |
| |
|
(5) any other information that the appropriate officials considers to be necessary to achieve the purpose of the Act. |
| SEC. 739. PROGRAM REVIEW AND REVISION. |
= |
SEC. 739. PROGRAM REVIEW AND REVISION. |
| At least once every 5 years, the Administrator shall review and, based on new or updated information and taking into consideration the recommendations of the Advisory Board, update and revise-- |
<> |
At least once every 5 years, the President shall review and, based on new or updated information and taking into consideration the recommendations of the Advisory Board, update and revise-- |
| (1) the list of eligible project types established under section 733; |
= |
(1) the list of eligible project types established under section 733; |
| (2) the methodologies established, including specific activity baselines, under section 734(a); |
|
(2) the methodologies established, including specific activity baselines, under section 734(a); |
| (3) the reversal requirements and mechanisms established or prescribed under section 734(b); |
|
(3) the reversal requirements and mechanisms established or prescribed under section 734(b); |
| (4) measures to improve the accountability of the offsets program; and |
|
(4) measures to improve the accountability of the offsets program; and |
| (5) any other requirements established under this part to ensure the environmental integrity and effective operation of this part. |
|
(5) any other requirements established under this part to ensure the environmental integrity and effective operation of this part. |
| SEC. 740. EARLY OFFSET SUPPLY. |
|
SEC. 740. EARLY OFFSET SUPPLY. |
| (a) Projects Registered Under Other Government-recognized Programs- Except as provided in subsection (b) or (c), the Administrator shall issue one offset credit for each ton of carbon dioxide equivalent emissions reduced, avoided, or sequestered-- |
<> |
(a) Projects Registered Under Other Government-Recognized Programs- Except as provided in subsection (b) or (c), after public notice and opportunity for comment, the President shall issue one offset credit for each ton of carbon dioxide equivalent emissions reduced, avoided, or sequestered-- |
| (1) under an offset project that was started after January 1, 2001; |
= |
(1) under an offset project that was started after January 1, 2001; |
| (2) for which a credit was issued under any regulatory or voluntary greenhouse gas emission offset program that the Administrator determines-- |
<> |
(2) for which a credit was issued under any regulatory or voluntary greenhouse gas emission offset program that the President determines-- |
| (A) was established under State or tribal law or regulation prior to January 1, 2009, or has been approved by the Administrator pursuant to subsection (e); |
|
(A) was established under State or tribal law or regulation prior to January 1, 2009, or has been approved by the President pursuant to subsection (e); |
| (B) has developed offset project type standards, methodologies, and protocols through a public consultation process or a peer review process; |
= |
(B) has developed offset project type standards, methodologies, and protocols through a public consultation process or a peer review process; |
| (C) has made available to the public standards, methodologies, and protocols that require that credited emission reductions, avoidance, or sequestration are permanent, additional, verifiable, and enforceable; |
|
(C) has made available to the public standards, methodologies, and protocols that require that credited emission reductions, avoidance, or sequestration are permanent, additional, verifiable, and enforceable; |
| (D) requires that all emission reductions, avoidance, or sequestration be verified by a State or tribal regulatory agency or an accredited third-party independent verification body; |
<> |
(D) requires that all emission reductions, avoidance, or sequestration be verified by a State regulatory agency or an accredited third-party independent verification body; |
| (E) requires that all credits issued are registered in a publicly accessible registry, with individual serial numbers assigned for each ton of carbon dioxide equivalent emission reductions, avoidance, or sequestration; and |
= |
(E) requires that all credits issued are registered in a publicly accessible registry, with individual serial numbers assigned for each ton of carbon dioxide equivalent emission reductions, avoidance, or sequestration; and |
| (F) ensures that no credits are issued for an activity if the entity administering the program, or a program administrator or representative, has funded, solicited, or served as a fund administrator for the development of the activity; and |
<> |
(F) ensures that no credits are issued for activities for which the entity administering the program, or a program administrator or representative, has funded, solicited, or served as a fund administrator for the development of, the project or activity that caused the emission reduction, avoidance, or sequestration; and |
| (3) for which the credit described in paragraph (2) is transferred to the Administrator. |
|
(3) for which the credit described in paragraph (2) is transferred to the President. |
| (b) Ineligible Credits- Subsection (a) shall not apply to offset credits that have expired or have been retired, canceled, or used for compliance under a program established under State or tribal law or regulation. |
= |
(b) Ineligible Credits- Subsection (a) shall not apply to offset credits that have expired or have been retired, canceled, or used for compliance under a program established under State or tribal law or regulation. |
| (c) Limitation- Notwithstanding subsection (a)(1), offset credits shall be issued under this section-- |
|
(c) Limitation- Notwithstanding subsection (a)(1), offset credits shall be issued under this section-- |
| (1) only for reductions or avoidance of greenhouse gas emissions, sequestration of greenhouse gases, or destruction of chlorofluorocarbons (subject to the conditions specified in section 619(b)(9) and based on the carbon dioxide equivalent value of the substance destroyed), that occur after January 1, 2009; and |
<> |
(1) only for reductions or avoidance of greenhouse gas emissions, or sequestration of greenhouse gases, that occur after January 1, 2009; and |
| (2) only until the date that is 3 years after the date of enactment of this title, or the date that regulations promulgated under section 732(a) take effect, whichever occurs sooner. |
= |
(2) only until the date that is 3 years after the date of enactment of this title, or the date that regulations promulgated under section 732(a) take effect, whichever occurs sooner. |
| (d) Retirement of Credits- The Administrator shall seek to ensure that offset credits described in subsection (a)(2) are retired for purposes of use under a program described in subsection (b). |
<> |
(d) Retirement of Credits- The President shall seek to ensure that offset credits described in subsection (a)(2) are retired for purposes of use under a program described in subsection (b). |
| |
|
(e) Other Programs- |
| (e) Other Programs- (1) Offset programs that either-- |
|
(1) IN GENERAL- Offset programs that either-- |
| (A) were not established under State or tribal law or regulation; or |
|
(A) were not established under State or tribal law; or |
| (B) were not established prior to January 1, 2009, |
|
(B) were not established prior to January 1, 2009; |
| but that otherwise meet all of the criteria of subsection (a)(2) may apply to the Administrator to be approved under this subsection as an eligible program for early offset credits under this section. |
|
but that otherwise meet all of the criteria of subsection (a)(2) may apply to the President to be approved under this subsection as an eligible program for early offset credits under this section. |
| (2) The Administrator shall approve any such program that the Administrator determines has criteria and methodologies of at least equal stringency to the criteria and methodologies of the programs established under State or tribal law or regulation that the Administrator determines meet the criteria of subsection (a)(2). The Administrator may approve types of offsets under any such program that are subject to criteria and methodologies of at least equal stringency to the criteria and methodologies for such types of offsets applied under the programs established under State or tribal law or regulation that the Administrator determines meet the criteria of subsection (a)(2). The Administrator shall make a determination on any application received under this section by no later than 180 days from the date of receipt of the application. |
|
(2) APPROVAL- The President shall approve any such program that the President determines has criteria and methodologies of at least equal stringency to the criteria and methodologies of the programs established under State or tribal law that the President determines meet the criteria of subsection (a)(2). The President may approve types of offsets under any such program that are subject to criteria and methodologies of at least equal stringency to the criteria and methodologies for such types of offsets applied under the programs established under State or tribal law that the President determines meet the criteria of subsection (a)(2). The President shall make a determination on any application received under this subsection by not later than 180 days from the date of receipt of the application. |
| SEC. 741. ENVIRONMENTAL CONSIDERATIONS. |
= |
SEC. 741. ENVIRONMENTAL CONSIDERATIONS. |
| If the Administrator lists forestry or other relevant land management-related offset projects as eligible offset project types under section 733, the Administrator, in consultation with appropriate Federal agencies, shall promulgate regulations for the selection and use of species in such offset projects-- |
<> |
If the President lists forestry or other relevant land management-related offset projects as eligible offset project types under section 733, the President, in consultation with appropriate Federal agencies, shall promulgate regulations to establish criteria for such offset projects-- |
| (1) to ensure that native species are given primary consideration in such projects; |
= |
(1) to ensure that native species are given primary consideration in such projects; |
| (2) to enhance biological diversity in such projects; |
|
(2) to enhance biological diversity in such projects; |
| (3) to prohibit the use of federally designated or State-designated noxious weeds; |
|
(3) to prohibit the use of federally designated or State-designated noxious weeds; |
| (4) to prohibit the use of a species listed by a regional or State invasive plant authority within the applicable region or State; and |
<> |
(4) to prohibit the use of a species listed by a regional or State invasive plant authority within the applicable region or State; |
| (5) in the case of forestry offset projects, in accordance with widely accepted, environmentally sustainable forestry practices. |
|
(5) in the case of forestry offset projects, in accordance with widely accepted, environmentally sustainable forestry practices; |
| |
|
(6) to ensure that the offset project area was not converted from native ecosystems, such as a forest, grassland, scrubland or wetland, to generate offsets, unless such conversation took place at least 10 years prior to the date of enactment of this title or before January 1, 2009, whichever date is earlier; and |
| |
|
(7) to the maximum extent practicable, ensure that the use of offset credits would be eligible to satisfy emission reduction commitments made by the United States in multilateral agreements, such as the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992 (or any successor agreement). |
| SEC. 742. TRADING. |
= |
SEC. 742. TRADING. |
| Section 724 shall apply to the trading of offset credits. |
|
Section 724 shall apply to the trading of offset credits. |
| |
<> |
SEC. 743. OFFICE OF OFFSETS INTEGRITY. |
| |
|
(a) Establishment- There is established within the Office of the Assistant Attorney General of the Environment and Natural Resources Division in the Department of Justice a Carbon Offsets Integrity Unit, to be headed by a Special Counsel (hereinafter referred to as the Special Counsel'). The Carbon Offsets Integrity Unit and the Special Counsel shall be responsible to and shall report directly to the Assistant Attorney General of the Environment and Natural Resources Division. |
| |
|
(b) Appointment- The Special Counsel shall be appointed by the President, by and with the advice and consent of the Senate. |
| |
|
(c) Responsibilities- The Special Counsel shall-- |
| |
|
(1) supervise and coordinate investigations and civil enforcement within the Department of Justice of the carbon offsets program under this part; |
| |
|
(2) ensure that Federal law relating to civil enforcement of the carbon offsets program is used to the fullest extent authorized; and |
| |
|
(3) ensure that adequate resources are made available for the investigation and enforcement of civil violations of the carbon offsets program. |
| |
|
(d) Compensation- The Special Counsel shall be paid at the basic pay payable for level V of the Executive Schedule under section 5316 of title 5, United States Code. |
| |
|
(e) Assignment of Personnel- There shall be assigned to the Carbon Offsets Integrity Unit such personnel as the Attorney General determines to be necessary to provide an appropriate level of enforcement activity in the area of carbon offsets. |
| SEC. 743. INTERNATIONAL OFFSET CREDITS. |
|
SEC. 744. INTERNATIONAL OFFSET CREDITS. |
| (a) In General- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may issue, in accordance with this section, international offset credits based on activities that reduce or avoid greenhouse gas emissions, or increase sequestration of greenhouse gases, in a developing country. Such credits may be issued for projects eligible under section 733 or as provided in subsection (c), (d), or (e) of this section. |
|
(a) In General- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may issue, in accordance with this section, international offset credits based on activities that reduce or avoid greenhouse gas emissions, or increase sequestration of greenhouse gases, in a developing country. Such credits may be issued for projects pursuant to the requirements of this part or as provided in subsection (c), (d), or (e). |
| (b) Issuance- |
= |
(b) Issuance- |
| (1) REGULATIONS- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with the Secretary of State, the Administrator of the United States Agency for International Development, and any other appropriate Federal agency, and taking into consideration the recommendations of the Advisory Board, shall promulgate regulations for implementing this section. Except as otherwise provided in this section, the issuance of international offset credits under this section shall be subject to the requirements of this part. |
<> |
(1) REGULATIONS- Not later than 2 years after the date of enactment of this title, the Administrator, in consultation with the Secretary of State, the Administrator of the United States Agency for International Development, and any other appropriate Federal agency, and taking into consideration the recommendations of the Advisory Board, shall promulgate regulations for implementing this section, taking into consideration specific factors relevant to the determination of eligible international offset project types and the implementation of international methodologies for each offset type approved. Except as otherwise provided in this section, the issuance of international offset credits under this section shall be subject to the requirements of this part. |
| (2) REQUIREMENTS FOR INTERNATIONAL OFFSET CREDITS- The Administrator may issue international offset credits only if-- |
= |
(2) REQUIREMENTS FOR INTERNATIONAL OFFSET CREDITS- The Administrator may issue international offset credits only if-- |
| (A) the United States is a party to a bilateral or multilateral agreement or arrangement that includes the country in which the project or measure achieving the relevant greenhouse gas emission reduction or avoidance, or greenhouse gas sequestration, has occurred; |
|
(A) the United States is a party to a bilateral or multilateral agreement or arrangement that includes the country in which the project or measure achieving the relevant greenhouse gas emission reduction or avoidance, or greenhouse gas sequestration, has occurred; |
| (B) such country is a developing country; and |
|
(B) such country is a developing country; and |
| (C) such agreement or arrangement-- |
|
(C) such agreement or arrangement-- |
| (i) ensures that the requirements of this part apply to the issuance of international offset credits under this section; and |
<> |
(i) ensures that all of the requirements of this part apply to the issuance of international offset credits under this section; |
| (ii) provides for the appropriate distribution of international offset credits issued. |
|
(ii) provides for the appropriate distribution of international offset credits issued; and |
| |
|
(iii) provides that the offset project developer be eligible to receive service of process in the United States for the purpose of all civil and regulatory actions in Federal courts, if such service is made in accordance with the Federal rules for service of process in the States in which the case or regulatory action is brought. |
| |
|
(3) SUPPLEMENTAL INTERNATIONAL OFFSET CATEGORIES- |
| |
|
(A) IN GENERAL- In order to ensure a sufficient supply of international offsets and to reduce the cost of compliance with this title, the Administrator may establish categories of international offsets in addition to those described in subsections (c), (d), and (e), if-- |
| |
|
(i) for 2 consecutive years, the auction price for allowances reaches the market stability reserve auction price under section 726(c); and |
| |
|
(ii) the Administrator determines that the total amount of international offsets held by covered entities for each of the 2 years referred to in clause (i) does not exceed the limit on international offsets established under section 722(d)(3). |
| |
|
(B) SUPPLEMENTAL CATEGORIES- |
| |
|
(i) IN GENERAL- Any supplemental categories of international offsets established pursuant to subparagraph (A) shall-- |
| |
|
(I) satisfy all applicable provisions of this part, including subsection (b)(2) of this section and sections 733 and 734; and |
| |
|
(II) meet the criteria described in clause (ii). |
| |
|
(ii) CRITERIA- The criteria referred to in clause (i)(II) are that-- |
| |
|
(I) the country in which the activities in the offset category would take place has developed and is implementing a low carbon development plan that includes provisions for the activities described in the offset category; |
| |
|
(II) the activities in the offset category are not activities included under subsection (c), (d) or (e); and |
| |
|
(III) the activities in the offset category satisfy specific criteria relevant to methodologies and institutional and technical capacities associated with developing country contexts to ensure adequate treatment of leakage, additionality, and permanence. |
| (c) Sector-based Credits- |
= |
(c) Sector-Based Credits- |
| (1) IN GENERAL- In order to minimize the potential for leakage and to encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas emissions, or sequester greenhouse gases, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall-- |
|
(1) IN GENERAL- In order to minimize the potential for leakage and to encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas emissions, or sequester greenhouse gases, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall-- |
| (A) identify sectors of specific countries with respect to which the issuance of international offset credits on a sectoral basis is appropriate; and |
<> |
(A) identify sectors, or combinations of sectors, within specific countries with respect to which the issuance of international offset credits on a sectoral basis is appropriate; and |
| (B) issue international offset credits for such sectors only on a sectoral basis. |
= |
(B) issue international offset credits for such sectors only on a sectoral basis. |
| (2) IDENTIFICATION OF SECTORS- |
|
(2) IDENTIFICATION OF SECTORS- |
| (A) GENERAL RULE- For purposes of paragraph (1)(A), a sectoral basis shall be appropriate for activities-- |
|
(A) GENERAL RULE- For purposes of paragraph (1)(A), a sectoral basis shall be appropriate for activities-- |
| (i) in countries that have comparatively high greenhouse gas emissions, or comparatively greater levels of economic development; and |
|
(i) in countries that have comparatively high greenhouse gas emissions, or comparatively greater levels of economic development; and |
| (ii) that, if located in the United States, would be within a sector subject to the compliance obligation under section 722. |
|
(ii) that, if located in the United States, would be within a sector subject to the compliance obligation under section 722. |
| (B) FACTORS- In determining the sectors and countries for which international offset credits should be awarded only on a sectoral basis, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall consider the following factors: |
|
(B) FACTORS- In determining the sectors and countries for which international offset credits should be awarded only on a sectoral basis, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall consider the following factors: |
| (i) The country's gross domestic product. |
|
(i) The country's gross domestic product. |
| (ii) The country's total greenhouse gas emissions. |
|
(ii) The country's total greenhouse gas emissions. |
| (iii) Whether the comparable sector of the United States economy is covered by the compliance obligation under section 722. |
|
(iii) Whether the comparable sector of the United States economy is covered by the compliance obligation under section 722. |
| (iv) The heterogeneity or homogeneity of sources within the relevant sector. |
|
(iv) The heterogeneity or homogeneity of sources within the relevant sector. |
| (v) Whether the relevant sector provides products or services that are sold in internationally competitive markets. |
|
(v) Whether the relevant sector provides products or services that are sold in internationally competitive markets. |
| (vi) The risk of leakage if international offset credits were issued on a project-level basis, instead of on a sectoral basis, for activities within the relevant sector. |
|
(vi) The risk of leakage if international offset credits were issued on a project-level basis, instead of on a sectoral basis, for activities within the relevant sector. |
| (vii) The capability of accurately measuring, monitoring, reporting, and verifying the performance of sources across the relevant sector. |
|
(vii) The capability of accurately measuring, monitoring, reporting, and verifying the performance of sources across the relevant sector. |
| (viii) Such other factors as the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, determines are appropriate to-- |
|
(viii) Such other factors as the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, determines are appropriate to-- |
| (I) ensure the integrity of the United States greenhouse gas emissions cap established under section 703; and |
<> |
(I) ensure the integrity of the United States greenhouse gas emissions limitations established under section 703; and |
| (II) encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas emissions, or sequester greenhouse gases. |
= |
(II) encourage countries to take nationally appropriate mitigation actions to reduce or avoid greenhouse gas emissions, or sequester greenhouse gases. |
| |
-+ |
(ix) The issuance of offsets for activities that are-- |
| |
|
(I) in addition to nationally appropriate mitigation actions taken by developing countries pursuant to the low-carbon development plans of the countries; and |
| |
|
(II) on a sectoral basis. |
| (3) SECTORAL BASIS- |
= |
(3) SECTORAL BASIS- |
| (A) DEFINITION- In this subsection, the term sectoral basis' means the issuance of international offset credits only for the quantity of sector-wide reductions or avoidance of greenhouse gas emissions, or sector-wide increases in sequestration of greenhouse gases, achieved across the relevant sector of the economy relative to a domestically enforceable baseline level of absolute emissions established in an agreement or arrangement described in subsection (b)(2)(A) for the sector. |
<> |
(A) DEFINITION- In this subsection, the term sectoral basis' means the issuance of international offset credits only for the quantity of sector-wide reductions or avoidance of greenhouse gas emissions, or sector-wide increases in sequestration of greenhouse gases, achieved across the relevant sector or sectors of the economy relative to a baseline level of emissions established in an agreement or arrangement described in subsection (b)(2)(A) for the sector. |
| (B) BASELINE- The baseline for a sector shall be established on an absolute basis and at levels of greenhouse gas emissions consistent with the thresholds identified in section 705(e)(2) and lower than would occur under a business-as-usual scenario taking into account relevant domestic or international policies or incentives to reduce greenhouse gas emissions, among other factors, and additionality and performance shall be determined on the basis of such baseline. |
|
(B) BASELINE- The baseline for a sector shall-- |
| |
|
(i) be established at levels of greenhouse gas emissions lower than would occur under a business-as-usual scenario, taking into account relevant domestic or international policies or incentives to reduce greenhouse gas emissions; |
| |
|
(ii) be used to determine additionality and performance; |
| |
|
(iii) account for all significant sources of emissions from a sector; |
| |
|
(iv) be adjusted over time to reflect changing circumstances; |
| |
|
(v) be developed taking into consideration such factors as-- |
| |
|
(I) any established emissions performance level for the sector; |
| |
|
(II) the current performance of the sector in the country; |
| |
|
(III) expected future trends of the sector in the country; and |
| |
|
(IV) historical data and other factors to ensure additionality; and |
| |
|
(vi) be designed to produce significant deviations from business-as-usual emissions, consistent with nationally appropriate mitigation commitments or actions, in a way that equitably contributes to meeting thresholds identified in section 705(e)(2). |
| (d) Credits Issued by an International Body- |
= |
(d) Credits Issued by an International Body- |
| (1) IN GENERAL- The Administrator, in consultation with the Secretary of State, may issue international offset credits in exchange for instruments in the nature of offset credits that are issued by an international body established pursuant to the United Nations Framework Convention on Climate Change, to a protocol to such Convention, or to a treaty that succeeds such Convention. The Administrator may issue international offset credits under this subsection only if, in addition to the requirements of subsection (b), the Administrator has determined that the international body that issued the instruments has implemented substantive and procedural requirements for the relevant project type that provide equal or greater assurance of the integrity of such instruments as is provided by the requirements of this part. Starting January 1, 2016, the Administrator shall issue no offset credit pursuant to this subsection if the activity generating the greenhouse gas emissions reductions or avoidance, or greenhouse gas sequestration, occurs in a country and sector identified by the Administrator under subsection (c). |
<> |
(1) IN GENERAL- The Administrator, in consultation with the Secretary of State, may issue international offset credits in exchange for instruments in the nature of offset credits that are issued by an international body established pursuant to the United Nations Framework Convention on Climate Change, to a protocol to such Convention, or to a treaty that succeeds such Convention. The Administrator may issue international offset credits under this subsection only if, in addition to the requirements of subsection (b), the Administrator has determined that the international body that issued the instruments has implemented substantive and procedural requirements for the relevant project type that provide equal or greater assurance of the integrity of such instruments as is provided by the requirements of this part. Beginning on January 1, 2016, the Administrator shall issue no offset credit pursuant to this subsection if the activity generating the greenhouse gas emission reductions or avoidance, or greenhouse gas sequestration, occurs in a country and sector identified by the Administrator under subsection (c), unless the offset credit issued by the international body is consistent with section 744(c). |
| (2) RETIREMENT- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or technical cooperation with the international issuing body described in paragraph (1), to ensure that such body-- |
= |
(2) RETIREMENT- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or technical cooperation with the international issuing body described in paragraph (1), to ensure that such body-- |
| (A) is notified of the Administrator's issuance, under this subsection, of an international offset credit in exchange for an instrument issued by such international body; and |
|
(A) is notified of the Administrator's issuance, under this subsection, of an international offset credit in exchange for an instrument issued by such international body; and |
| (B) provides, to the extent feasible, for the disqualification of the instrument issued by such international body for subsequent use under any relevant foreign or international greenhouse gas regulatory program, regardless of whether such use is a sale, exchange, or submission to satisfy a compliance obligation. |
|
(B) provides, to the extent feasible, for the disqualification of the instrument issued by such international body for subsequent use under any relevant foreign or international greenhouse gas regulatory program, regardless of whether such use is a sale, exchange, or submission to satisfy a compliance obligation. |
| (e) Offsets From Reduced Deforestation- |
|
(e) Offsets From Reduced Deforestation- |
| (1) REQUIREMENTS- The Administrator, in accordance with the regulations promulgated under subsection (b)(1) and an agreement or arrangement described in subsection (b)(2)(A), shall issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation only if, in addition to the requirements of subsection (b)-- |
|
(1) REQUIREMENTS- The Administrator, in accordance with the regulations promulgated under subsection (b)(1) and an agreement or arrangement described in subsection (b)(2)(A), shall issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation only if, in addition to the requirements of subsection (b)-- |
| (A) the activity occurs in-- |
|
(A) the activity occurs in-- |
| (i) a country listed by the Administrator pursuant to paragraph (2); |
|
(i) a country listed by the Administrator pursuant to paragraph (2); |
| (ii) a state or province listed by the Administrator pursuant to paragraph (5); or |
|
(ii) a State or province listed by the Administrator pursuant to paragraph (5); or |
| (iii) a country listed by the Administrator pursuant to paragraph (6); |
|
(iii) a country listed by the Administrator pursuant to paragraph (6); |
| (B) except as provided in paragraph (5) or (6), the quantity of the international offset credits is determined by comparing the national emissions from deforestation relative to a national deforestation baseline for that country established, in accordance with an agreement or arrangement described in subsection (b)(2)(A), pursuant to paragraph (4); |
|
(B) except as provided in paragraph (5) or (6), the quantity of the international offset credits is determined by comparing the national emissions from deforestation relative to a national deforestation baseline for that country established, in accordance with an agreement or arrangement described in subsection (b)(2)(A), pursuant to paragraph (4); |
| (C) the reduction in emissions from deforestation has occurred before the issuance of the international offset credit and, taking into consideration relevant international standards, has been demonstrated using ground-based inventories, remote sensing technology, and other methodologies to ensure that all relevant carbon stocks are accounted; |
|
(C) the reduction in emissions from deforestation has occurred before the issuance of the international offset credit and, taking into consideration relevant international standards, has been demonstrated using ground-based inventories, remote sensing technology, and other methodologies to ensure that all relevant carbon stocks are accounted; |
| (D) the Administrator has made appropriate adjustments, such as discounting for any additional uncertainty, to account for circumstances specific to the country, including its technical capacity described in paragraph (2)(A); |
|
(D) the Administrator has made appropriate adjustments, such as discounting for any additional uncertainty, to account for circumstances specific to the country, including its technical capacity described in paragraph (2)(A); |
| |
<> |
(E) the Administrator has determined that the country within which the activity occurs has in place a publicly available strategic plan that includes the criteria listed in paragraph (2)(C); |
| (E) the activity is designed, carried out, and managed-- |
|
(F) the activity is designed, carried out, and managed-- |
| (i) in accordance with widely accepted, environmentally sustainable forest management practices; |
|
(i) in accordance with forest management practices that-- |
| |
|
(I) improve the livelihoods of forest communities; |
| |
|
(II) maintain the natural biodiversity, resilience, and carbon storage capacity of forests; and |
| |
|
(III) do not adversely impact the permanence of forest carbon stocks or emission reductions; |
| (ii) to promote or restore native forest species and ecosystems where practicable, and to avoid the introduction of invasive nonnative species; |
= |
(ii) to promote or restore native forest species and ecosystems where practicable, and to avoid the introduction of invasive nonnative species; |
| (iii) in a manner that gives due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups; |
|
(iii) in a manner that gives due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups; |
| (iv) with consultations with, and full participation of, local communities, indigenous peoples, and forest-dependent communities, in affected areas, as partners and primary stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and |
<> |
(iv) with consultations with, and full participation of, local communities, indigenous peoples, and forest-dependent communities, in affected areas, as partners and primary stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; |
| (v) with equitable sharing of profits and benefits derived from offset credits with local communities, indigenous peoples, and forest-dependent communities; and |
|
(v) with transparent and equitable sharing of profits and benefits derived from offset credits with local communities, indigenous peoples, and forest-dependent communities; |
| |
|
(vi) with full transparency, third-party independent oversight, and public dissemination of related financial and contractual arrangements, and |
| |
|
(vii) so that the social and environmental impacts of these activities are monitored and reported in sufficient detail to allow appropriate officials to determine compliance with the requirements of this section; |
| (F) the reduction otherwise satisfies and is consistent with any relevant requirements established by an agreement reached under the auspices of the United Nations Framework Convention on Climate Change. |
|
(G) the reduction otherwise satisfies and is consistent with any relevant requirements established by an agreement reached under the auspices of the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992; and |
| |
|
(H) in the case that offsets are determined by comparing the national emissions from deforestation relative to a national, state-level, or province-level deforestation baseline as provided in paragraph (4) or (5)-- |
| |
|
(i) a list of activities to reduce deforestation is provided to the Administrator and made publicly available; |
| |
|
(ii) the social and environmental impacts of these activities are monitored and reported in sufficient detail to allow the Administrator to determine compliance with the requirements of this section; and |
| |
|
(iii) the distribution of revenues for activities to reduce deforestation is transparent, subject to independent third-party oversight, and publicly disseminated. |
| (2) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, and in accordance with an agreement or arrangement described in subsection (b)(2)(A), shall establish, and periodically review and update, a list of the developing countries that have the capacity to participate in deforestation reduction activities at a national level, including-- |
= |
(2) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, and in accordance with an agreement or arrangement described in subsection (b)(2)(A), shall establish, and periodically review and update, a list of the developing countries that have the capacity to participate in deforestation reduction activities at a national level, including-- |
| (A) the technical capacity to monitor, measure, report, and verify forest carbon fluxes for all significant sources of greenhouse gas emissions from deforestation with an acceptable level of uncertainty, as determined taking into account relevant internationally accepted methodologies, such as those established by the Intergovernmental Panel on Climate Change; |
|
(A) the technical capacity to monitor, measure, report, and verify forest carbon fluxes for all significant sources of greenhouse gas emissions from deforestation with an acceptable level of uncertainty, as determined taking into account relevant internationally accepted methodologies, such as those established by the Intergovernmental Panel on Climate Change; |
| (B) the institutional capacity to reduce emissions from deforestation, including strong forest governance and mechanisms to equitably distribute deforestation resources for local actions; and |
<> |
(B) the institutional capacity to reduce emissions from deforestation, including strong forest governance and mechanisms to ensure transparency and third-party independent oversight of offset activities and revenues, and the transparent and equitable distribution of offset revenues for local actions; and |
| (C) a land use or forest sector strategic plan that-- |
= |
(C) a land use or forest sector strategic plan that-- |
| (i) assesses national and local drivers of deforestation and forest degradation and identifies reforms to national policies needed to address them; |
|
(i) assesses national and local drivers of deforestation and forest degradation and identifies reforms to national policies needed to address them; |
| (ii) estimates the country's emissions from deforestation and forest degradation; |
|
(ii) estimates the country's emissions from deforestation and forest degradation; |
| (iii) identifies improvements in data collection, monitoring, and institutional capacity necessary to implement a national deforestation reduction program; and |
<> |
(iii) identifies improvements in and a timeline for data collection, monitoring, and institutional capacity necessary to implement an effective national deforestation reduction program that meets the criteria set forth in this section (including a national deforestation baseline); |
| (iv) establishes a timeline for implementing the program and transitioning to low-emissions development with respect to emissions from forest and land use activities. |
|
(iv) establishes a timeline for implementing the program and transitioning forest-based economies to low-emissions development pathways with respect to emissions from forest and land use activities; |
| |
|
(v) includes a national policy for consultations with, and full participation of, all stakeholders, especially indigenous and forest-dependent communities, in its design, planning, and implementation of activities, whether at the national or local level, to reduce deforestation in the country (including a national process for addressing grievances if stakeholders have been caused social, environmental, or economic harm); |
| |
|
(vi) provides for the distribution of revenues for activities to reduce deforestation transparently and publicly, subject to independent third-party oversight; and |
| |
|
(vii) includes a national platform or a type of registry for information relating to deforestation and degradation policy and program implementation processes, including a mechanism for the monitoring and reporting of the social and environmental impacts of those activities. |
| (3) PROTECTION OF INTERESTS- With respect to an agreement or arrangement described in subsection (b)(2)(A) that addresses international offset credits under this subsection, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall seek to ensure the establishment and enforcement by such country of legal regimes, processes, standards, and safeguards that-- |
|
(3) PROTECTION OF INTERESTS- With respect to an agreement or arrangement described in subsection (b)(2)(A) with a country that addresses international offset credits under this subsection, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall undertake due diligence to ensure the establishment and enforcement by such country of legal regimes, processes, standards, and safeguards that-- |
| (A) give due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups; |
= |
(A) give due regard to the rights and interests of local communities, indigenous peoples, forest-dependent communities, and vulnerable social groups; |
| (B) promote consultations with, and full participation of, forest-dependent communities and indigenous peoples in affected areas, as partners and primary stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and |
|
(B) promote consultations with, and full participation of, forest-dependent communities and indigenous peoples in affected areas, as partners and primary stakeholders, prior to and during the design, planning, implementation, and monitoring and evaluation of activities; and |
| (C) encourage equitable sharing of profits and benefits derived from international offset credits with local communities, indigenous peoples, and forest-dependent communities. |
<> |
(C) encourage transparent and equitable sharing of profits and benefits derived from international offset credits with local communities, indigenous peoples, and forest-dependent communities. |
| (4) NATIONAL DEFORESTATION BASELINE- A national deforestation baseline established under this subsection shall-- |
= |
(4) NATIONAL DEFORESTATION BASELINE- A national deforestation baseline established under this subsection shall-- |
| (A) be national in scope; |
|
(A) be national in scope; |
| (B) be consistent with nationally appropriate mitigation commitments or actions with respect to deforestation, taking into consideration the average annual historical deforestation rates of the country during a period of at least 5 years, the applicable drivers of deforestation, and other factors to ensure additionality; |
<> |
(B) be consistent with nationally appropriate mitigation commitments or actions with respect to deforestation, taking into consideration the average annual historical deforestation rates of the country during a period of at least 5 years, the applicable drivers of deforestation, and other factors to ensure that only reductions that are in addition to such commitments or actions will generate offsets; |
| (C) establish a trajectory that would result in zero net deforestation by not later than 20 years after the national deforestation baseline has been established; |
|
(C) establish a trajectory that would result in zero net deforestation by not later than 20 years after the national deforestation baseline has been established, including a spatially explicit land use plan that identifies intact and primary forest areas and managed forest areas that are to remain while the country is reaching the zero net deforestation trajectory; |
| (D) be adjusted over time to take account of changing national circumstances; |
= |
(D) be adjusted over time to take account of changing national circumstances; |
| (E) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the country; and |
|
(E) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the country; and |
| (F) be consistent with the national deforestation baseline, if any, established for such country under section 754(d)(1) and (2). |
<> |
(F) be consistent with the national deforestation baseline, if any, established for such country under section 753. |
| (5) STATE-LEVEL OR PROVINCE-LEVEL ACTIVITIES- |
= |
(5) STATE-LEVEL OR PROVINCE-LEVEL ACTIVITIES- |
| (A) ELIGIBLE STATES OR PROVINCES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall establish within 2 years after the date of enactment of this title, and periodically review and update, a list of states or provinces in developing countries where-- |
<> |
(A) ELIGIBLE STATES OR PROVINCES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall establish, and periodically review and update, a list of States or provinces in developing countries where-- |
| (i) the developing country is not included on the list of countries established pursuant to paragraph (6)(A); |
= |
(i) the developing country is not included on the list of countries established pursuant to paragraph (6)(A); |
| |
<> |
(ii) the State or province is undertaking deforestation reduction activities; |
| |
|
(iii) the State or province has the capacity to engage in deforestation reduction activities at the State or province level, including-- |
| |
|
(I) the technical capacity to monitor and measure forest carbon fluxes for all significant sources of greenhouse gas emissions from deforestation with an acceptable amount of uncertainty, including a spatially explicit land use plan that identifies intact and primary forest areas and managed forest areas that are to remain while the country is reaching the zero net deforestation trajectory; and |
| |
|
(II) the institutional capacity to reduce emissions from deforestation, including strong forest governance and mechanisms to deliver forest conservation resources for local actions; |
| (ii) the state or province by itself is a major emitter of greenhouse gases from tropical deforestation on a scale commensurate to the emissions of other countries; and |
|
|
| (iii) the state or province meets the eligibility criteria in paragraphs (2) and (3) for the geographic area under its jurisdiction. |
|
(iv) the State or province meets the eligibility criteria in paragraphs (2) and (3) for the geographic area under its jurisdiction; and |
| |
|
(v) the country-- |
| |
|
(I) demonstrates that efforts are underway to transition to a national program within 5 years; or |
| |
|
(II) in the determination of the Administrator, is making a good-faith effort to develop a land use or forest sector strategic national plan or program that meets the criteria described in paragraph (2)(C). |
| (B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation at a state or provincial level that meet the requirements of this section. Such credits shall be determined by comparing the emissions from deforestation within that state or province relative to the state or province deforestation baseline for that state or province established, in accordance with an agreement or arrangement described in subsection (b)(2)(A), pursuant to subparagraph (C) of this paragraph. |
= |
(B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through activities to reduce deforestation at a State or provincial level that meet the requirements of this section. Such credits shall be determined by comparing the emissions from deforestation within that State or province relative to the State or province deforestation baseline for that State or province established, in accordance with an agreement or arrangement described in subsection (b)(2)(A), pursuant to subparagraph (C) of this paragraph. |
| (C) STATE OR PROVINCE DEFORESTATION BASELINE- A state or province deforestation baseline shall-- |
<> |
(C) STATE-LEVEL OR PROVINCE-LEVEL DEFORESTATION BASELINE- A State-level or province-level deforestation baseline shall-- |
| (i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the activity is occurring, taking into consideration the average annual historical deforestation rates of the state or province during a period of at least 5 years, relevant drivers of deforestation, and other factors to ensure additionality; |
|
(i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the activity is occurring, so that only reductions that are in addition to those commitments or actions will generate offsets; |
| |
|
(ii) be developed taking into consideration the average annual historical deforestation rates of the State or province during a period of at least 5 years, relevant drivers of deforestation, and other factors to ensure additionality; |
| (ii) establish a trajectory that would result in zero net deforestation by not later than 20 years after the state or province deforestation baseline has been established; and |
|
(iii) establish a trajectory that would result in zero net deforestation by not later than 20 years after the State-level or province-level deforestation baseline has been established; and |
| (iii) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the state or province and adjusted to fully account for emissions leakage outside the state or province. |
|
(iv) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the State or province and adjusted to fully account for emissions leakage outside the State or province through monitoring of major forested areas in the host country and other areas of the host country susceptible to leakage. |
| (D) PHASE OUT- Beginning 5 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall issue no further international offset credits for eligible state-level or province-level activities to reduce deforestation pursuant to this paragraph. |
|
(D) PHASE-OUT- Beginning 5 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall issue no further international offset credits for eligible State-level or province-level activities to reduce deforestation pursuant to this paragraph. |
| (6) PROJECTS AND PROGRAMS TO REDUCE DEFORESTATION- |
= |
(6) PROJECTS AND PROGRAMS TO REDUCE DEFORESTATION- |
| (A) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall establish within 2 years after the date of enactment of this title, and periodically review and update, a list of developing countries each of which-- |
<> |
(A) ELIGIBLE COUNTRIES- The Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall establish, and periodically review and update, a list of developing countries that-- |
| (i) the Administrator determines, based on recent, credible, and reliable emissions data, accounts for less than 1 percent of global greenhouse gas emissions and less than 3 percent of global forest-sector and land use change greenhouse gas emissions; and |
|
(i) the Administrator determines, based on recent, credible, and reliable emissions data, account for less than 1 percent of global greenhouse gas emissions and less than 3 percent of global forest-sector and land use change greenhouse gas emissions; |
| (ii) has, or in the determination of the Administrator is making a good faith effort to develop, a land use or forest sector strategic plan that meets the criteria described in paragraph (2)(C). |
|
(ii) have, or in the determination of the Administrator are making a good faith effort to develop, a land use or forest sector strategic plan that meets the criteria described in paragraph (2)(C); and |
| |
|
(iii) has made, or in the determination of the Administrator, is making, a good-faith effort to develop, through the implementation of activities under this section, a monitoring program for major forested areas in a host country and other areas in a host country susceptible to leakage, including a spatially explicit land use plan that identifies intact and primary forest areas and managed forest areas that are to remain while country is reaching the zero net deforestation trajectory. |
| (B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through project or program level activities to reduce deforestation in countries listed under subparagraph (A) that meet the requirements of this section. The quantity of international offset credits shall be determined by comparing the project-level or program-level emissions from deforestation to a deforestation baseline for such project or program established pursuant to subparagraph (C). |
= |
(B) ACTIVITIES- The Administrator may issue international offset credits for greenhouse gas emission reductions achieved through project or program level activities to reduce deforestation in countries listed under subparagraph (A) that meet the requirements of this section. The quantity of international offset credits shall be determined by comparing the project-level or program-level emissions from deforestation to a deforestation baseline for such project or program established pursuant to subparagraph (C). |
| (C) PROJECT-LEVEL OR PROGRAM-LEVEL BASELINE- A project-level or program-level deforestation baseline shall-- |
|
(C) PROJECT-LEVEL OR PROGRAM-LEVEL BASELINE- A project-level or program-level deforestation baseline shall-- |
| (i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the project or program is occurring, taking into consideration the average annual historical deforestation rates relevant to the specific project or program during a period of at least 5 years, applicable drivers of deforestation, and other factors to ensure additionality; |
<> |
(i) be consistent with any existing nationally appropriate mitigation commitments or actions for the country in which the project or program is occurring, so that only reductions that are in addition to such commitments or actions will generate offsets; |
| |
|
(ii) be developed taking into consideration the average annual historical deforestation rates in the project or program boundary during a period of at least 5 years, applicable drivers of deforestation, and other factors to ensure additionality; |
| (ii) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the project or program boundary; and |
|
(iii) be designed to account for all significant sources of greenhouse gas emissions from deforestation in the project or program boundary; and |
| (iii) be adjusted to fully account for emissions leakage outside the project or program boundary. |
|
(iv) be adjusted to fully account for emissions leakage outside the project or program boundary, including-- |
| |
|
(I) estimation through monitoring of major forested areas in a host country and other areas in a host country susceptible to leakage, pursuant to section 744(e)(5); and |
| |
|
(II) a spatially explicit land use plan that identifies intact and primary forest areas and managed forest areas that are to remain while country is reaching the zero net deforestation trajectory. |
| |
|
(D) PHASE-OUT- |
| (D) PHASE OUT- (i) Beginning 5 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall issue no further international offset credits for project-level or program-level activities pursuant to this paragraph, except as provided in clause (ii). |
|
(i) IN GENERAL- Beginning on the date that is 8 years after the first calendar year for which a covered entity must demonstrate compliance with section 722(a), the Administrator shall issue no further international offset credits for project-level or program-level activities as described in this paragraph, except as provided in clause (ii). |
| (ii) The Administrator may extend the phase out deadline for the issuance of international offset credits under this paragraph by up to 8 years with respect to eligible activities taking place in a least developed country, which for purposes of this paragraph is defined as a foreign country that the United Nations has identified as among the least developed of developing countries at the time that the Administrator determines to provide an extension, if the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, determines the country-- |
|
(ii) EXTENSION- The Administrator may extend the phase out deadline for the issuance of international offset credits under this section by up to 5 years with respect to eligible activities taking place in a least developed country, which is a foreign country that the United Nations has identified as among the least developed of developing countries at the time that the Administrator determines to provide an extension, provided that the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, determines the country-- |
| (I) lacks sufficient capacity to adopt and implement effective programs to achieve reductions in deforestation measured against national baselines; |
= |
(I) lacks sufficient capacity to adopt and implement effective programs to achieve reductions in deforestation measured against national baselines; |
| (II) is receiving support under part E to develop such capacity; and |
|
(II) is receiving support under part E to develop such capacity; and |
| (III) has developed and is working to implement a credible national strategy or plan to reduce deforestation. |
|
(III) has developed and is working to implement a credible national strategy or plan to reduce deforestation. |
| (7) DEFORESTATION- In implementing this subsection, the Administrator, taking into consideration the recommendations of the Advisory Board, may include forest degradation, or soil carbon losses associated with forested wetlands or peatlands, within the meaning of deforestation. |
<> |
|
| (8) CONSULTATION- In implementing this subsection, the Administrator shall consult with the Secretary of Agriculture on relevant matters within such Secretary's area of expertise. |
|
|
| |
|
(7) EXPANSION OF SCOPE- In implementing this subsection, the Administrator, taking into consideration the recommendations of the Advisory Board, may-- |
| |
|
(A) expand credible activities to include forest degradation; and |
| |
|
(B) include soil carbon losses associated with forested wetlands or peatlands. |
| (f) Modification of Requirements- In promulgating regulations under subsection (b)(1) with respect to the issuance of international offset credits under subsection (c), (d), or (e), the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may modify or omit a requirement of this part (excluding the requirements of this section) if the Administrator determines that the application of that requirement to such subsection is not feasible. In modifying or omitting such a requirement on the basis of infeasibility, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall ensure, with an adequate margin of safety, the integrity of international offset credits issued under this section and of the greenhouse gas emissions cap established pursuant to section 703. |
|
(f) Modification of Requirements- In promulgating regulations under subsection (b)(1) with respect to the issuance of international offset credits under subsection (c), (d), or (e), the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, may modify or omit a requirement of this part (excluding the requirements of this section) if the Administrator determines that the application of that requirement to such subsection is not feasible or would result in the creation of offset credits that would not be eligible to satisfy emissions reduction commitments made by the United States pursuant to the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992 (or any successor agreement). In modifying or omitting such a requirement on the basis of infeasibility, the Administrator, in consultation with the Secretary of State and the Administrator of the United States Agency for International Development, shall ensure, with an adequate margin of safety, the integrity of international offset credits issued under this section and of the greenhouse gas emissions limitations established pursuant to section 703. |
| (g) Avoiding Double Counting- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or technical cooperation, to ensure that activities on the basis of which international offset credits are issued under this section are not used for compliance with an obligation to reduce or avoid greenhouse gas emissions, or increase greenhouse gas sequestration, under a foreign or international regulatory system. In addition, no international offset credits shall be issued for emission reductions from activities with respect to which emission allowances were allocated under section 781 for distribution under part E. |
|
(g) Avoiding Double Counting- The Administrator, in consultation with the Secretary of State, shall seek, by whatever means appropriate, including agreements, arrangements, or technical cooperation, to ensure that activities on the basis of which international offset credits are issued under this section are not used for compliance with an obligation to reduce or avoid greenhouse gas emissions, or increase greenhouse gas sequestration, under a foreign or international regulatory system. In addition, no international offset credits shall be issued for emission reductions from activities with respect to which emission allowances were allocated under section 771(d) for distribution under part E. |
| (h) Limitation- The Administrator shall not issue international offset credits generated by projects based on the destruction of hydrofluorocarbons. |
|
(h) Limitation- The Administrator shall not issue international offset credits generated by projects based on the destruction of hydrofluorocarbons.'. |
