10:30 a.m., Faunce House, Brown University
Sen. John H. Chafee, Rhode Island
Statement by the witnesses:
Scott P. Rabideau
Rhode Island House of Representatives
Air Resources Division
New Hampshire Department of Environmental Services
International Climate Change Partnership
Ittleson Associate Professor of Environmental Studies
Massachusetts Commission for Conservation of Soil, Water and Related
Statement of Sen. John H. Chafee
June 3, 1999
Providence, Rhode Island
The subject we're gathered to hear about this morning, climate change
caused by human activity and what to do about it, is very controversial.
The science is challenging because we're considering the long-term future
of a global system that involves interactions of atmosphere, oceans,
forests and human society, and the politics is challenging because the
US Government has signed a far-reaching treaty, the Kyoto Protocol of
1997, that is, regrettably, strongly opposed by much of US industry.
I had the privilege of being at that Kyoto gathering in 1997.
The uncertainty and controversy seemed daunting; but it's important,
it seems to me, that we struggle with this issue. If we are headed
in the direction most scientists predict we're headed in, we can't
afford to put off starting solutions until the day when all our questions
are completely answered. If we wait around until everything is absolutely
clear, no controversy, it may be well too late. Some things are certain,
we know that greenhouse gases trap heat in the atmosphere. We know
that greenhouse gases exist naturally and are cycled through oceans
and forests. From the ice cores taken from glaciers we've been able
to examine the concentration of atmospheric carbon dioxide, an important
greenhouse gas over the past 400,000 years. Now, that's a long time,
400,000 years. We know that increases in carbon dioxide have always
been associated with increases in temperature over that period.
In 1995, an organization of 2,500 scientists formed the intergovernmental
panel on climate change, IPCC, that's a term we'll hear frequently
today and in the continuing study of this matter, and this group of
scientists, 2,500 of them, the IPCC issued a report summarizing the
evidence gathered over the past 100 years on the greenhouse effects
of carbon dioxide and other gases. They concluded there's a small
but discernible human influence on global climate, and they warned
that this impact may be gathering momentous. The concentration of
carbon dioxide in the atmosphere has steadily increased over the past
200 years. The earth is warmed by one degree Fahrenheit over the past
hundred years. It may warm another two to six degrees Fahrenheit over
the next 100 years. Now, those are incredible statistics. That would
be the fastest increase in temperature experienced by the species
now comprising life on earth. Whether the complex ecosystems that
are involved evolved over eons can adapt successfully, the change
is so rapid, in other words, two to six degrees change in Fahrenheit
in 100 years, can we adjust to that? It's the most important unanswered
question. But we humans will face challenges as well. For instance,
IPCC predicts that sea levels may rise an additional half to three-and-a-half
feet in that 100 year period. All of us in Rhode Island can appreciate
the significance of a result like that, an increase in sea levels
of a half to three-and-a-half feet.
The bill we're considering, S.547, this morning makes only the modest
beginnings on this large problem. It would encourage voluntary reductions
in greenhouse gas emissions by U.S. industries by promising those
industries credits for the reductions they took if a mandatory program
is ever adopted. In other words, the legislation we have says if you
-- we don't have any mandatory statute on the books yet about having
to reduce greenhouse emissions, but some companies are willing to
do it, and if voluntarily they want to do it, reduce their greenhouse
emission, if subsequently legislation is enacted requiring such reductions,
then the companies that have made the reductions prior thereto will
get credit for it, and they're doing it voluntarily and they deserve
credit for it. Now, this is a modest start, but getting a start is
very important. Carbon dioxide accumulates in the atmosphere. From
the perspective of climate, the ton of carbon dioxide that we voluntarily
avoid emitting today is just as important as the ton that may eventually
be prevented by the Kyoto Protocol of some other mandatory program.
It may be many years before our political system responds to the
threat of climate change in any meaningful way. When it does, and
I, for one, am convinced that we must change our course, the reductions
that have been accumulated year after year from this modest beginning
will pay big dividends, and the companies that take advantage of this
opportunity will realize much lower compliance costs because they
had a longer period to adjust their business practices.
Now, even this modest beginning, you say who can object to that,
it's voluntary, you get credit later on if you make the reductions,
who can complain. Well, welcome to Washington. Even this modest beginning
is not without its controversy. Everyone salutes the concept of giving
credit for voluntary reductions, but, indeed, there are devils in
the details. What Government agency should run the program? How do
we ensure that our accounting methods only count real reductions in
greenhouse gases? How do we recognize projects like reforestation
or preservation that sequester carbon rather than reduce emissions?
Should foreign investments count? Should we give credit to the reductions
that have been made since the Rio Treaty was signed in 1982? How far
back do we go?
TESTIMONY OF RHODE ISLAND STATE REPRESENTATIVE
SCOTT P. RABIDEAU, DISTRICT 60, BURRILLVILLE
U.S. SENATE BILL 547 : "CREDIT FOR VOLUNTARY REDUCTION"
Mr. Chairman and members of the Committee on Environment and Public Works,
I cannot tell you what an honor it is to have the opportunity to testify
before this United States Senate Committee. As a member of the Rhode Island
General Assembly, I appear before legislative committees on what seems
like a daily basis. But I never imagined that I would one day testify
before the U.S. Senate.
The bill that I wish to testify on behalf of is perhaps one of the
most visionary pieces of legislation I have ever come across. In essence,
S. 547 allows U.S. corporations to receive credit for voluntarily reducing
greenhouse gas emissions or increasing the sequestration of carbon.
The ingenuity of this bill is due to the fact that these credits shall
be applied to future laws and regulations. It is a way for a good corporate
citizen to gain recognition and a potential fiscal reward for reducing
carbon emissions. This is something that many companies have been preparing
for in their capital planning. Should this bill become law, it may well
move up the timetable for such capital spending.
Beyond the credit for voluntary reductions is the truly unique issue
of carbon sequestration. I would like to speak to how I believe this
portion of the bill would positively affect my little state of Rhode
All land which is undeveloped and vegetated annually sequesters varying
amounts of atmospheric carbon. I will leave the issue of metric tons
of carbon sequestered per acre (or hectare) to the academics that will
surely testify at some point in time on this issue. Suffice to say,
an acre of young, well managed forest in a temperate climate like Rhode
Island's can annually sequester multiple tons of atmospheric carbon.
That's correct, multiple tons of carbon are sequestered by an acre of
forested land. Therefore, it is safe to presume that the permanent preservation
of as little as 100 acres of open space can sustain a carbon reservoir
and avoid creating a carbon source.
I would like to present you with a real world example of how land can
quickly change from reservoir to source. The first picture shown within
this text is an aerial photograph of a section of Warwick, Rhode Island.
This photo clearly depicts a densely populated residential community,
a golf course, and a large tract of undeveloped farmland. This represents
perhaps the last tract of farmland within a radius of one mile or more.
As of this moment, the owner of the property is in the process of subdividing
his farmland to establish a residential subdivision. If you skip over
and review the next photograph, I have taken the liberty to demonstrate
what the property might look like after the summer of the year 2000.
In one short year's time, this property will go from carbon reservoir
to carbon source.
Figure #1 depicts the results of a Brown University study evaluating
Rhode Island's greenhouse gas emissions from 1990-1996. Residential
development was responsible for approximately 18 percent of the total
increase in greenhouse gas emissions during that time period. In 1999,
the enormous demand for housing in Rhode Island has driven up the value
of raw land. To further complicate issues, the schools in Rhode Island
are funded primarily on the local revenues received from property taxes.
The result, landowners are faced with exceptionally high taxes on their
open space parcels, while developers are constantly dangling large sums
of money before them to acquire the properties for residential housing.
It is a no win situation for the environment.
Believe it or not, 55 percent of Rhode Island is currently forested.
That's right, over one half of this state consists of trees. But that
percentage is dwindling rapidly. Therein lies the opportunity of S.
I believe that corporate America can play a pivotal role in the preservation
of open space in Rhode Island and the entire United States. The ability
to acquire a greenhouse gas credit for the demonstrated sequestration
of atmospheric carbon could well be the incentive necessary to motivate
the boardrooms across America to take an active role in the management
and preservation of the country's forests. Not only could a company
receive a regulatory credit for the dedication of permanent open space,
but also the marketing potential of the effort could offer a higher
profile when targeting today's environmentally conscious consumer.
I realize that the environmental community will express deep concern
that corporate giants may abuse such a process. Corporations and their
lobbyists will bemoan the fact that there may be a tacit acknowledgement
of the Kyoto Protocol in this bill.
I however applaud the sponsors of this bill and stand firm in a belief
that change, true change in society, does not come from the actions
of a government regulatory, CEO or a multinational corporation, or even
a well meaning environmental organization. A politician with vision
effects true change. We become politicians for many reasons. But first
among them is the desire to improve our state, our country or even the
world. This bill will change the world.
Scott P. Rabideau, District 60, State Representative
Thank you, Mr. Chairman. My name is Kenneth A. Colburn, and I am the Director
of the Air Resources Division of the New Hampshire Department of Environmental
Services (DES). The Department appreciates this opportunity to address
the Committee regarding S.547, the Credit for Voluntary Reductions Act
Testimony of Kenneth A. Colburn, Director
Air Resources Division
New Hampshire Department of Environmental Services
Providence, Rhode Island
June 3, 1999
In New Hampshire, a state rich in natural resources, our economic livelihood
has long been directly and inextricably linked to the health of our
natural environment. Whether we hark back to the heyday of the timber
and paper industries, or look instead at today's tourism-based economy
and high quality of life, this linkage has remained a constant. Two
other constants have been our state's traditional frugality; and our
stubborn reluctance to control and regulate when equally favorable outcomes
can be achieved by properly encouraging voluntary actions. Thus it comes
as no surprise that we strongly support S.547, an initiative that shares
these values. S.547, the Credit for Voluntary Reductions Act of 1999,
would directly benefit both the environment and the economy, and encourage
cost-effective solutions on a voluntary basis.
S.547 encourages U.S. entities business, institutions, governments,
etc. to pursue actions that will mitigate the threat of global climate
change. In doing so, they will provide our nation with other benefits
including substantial savings in energy expenditures, reduced air and
water pollution, less waste, better natural resource management, and
enhanced technological competitiveness. Early voluntary greenhouse gas
reduction measures will help to ensure that the legacy we leave our
children and grandchildren is not one of myopic selfishness and environmental
degradation, but one of sustainable stewardship and respect for our
planet. This Act is not about the science of global climate change,
nor is it about the Kyoto Protocol. It is not about what level of reductions
is necessary, or when they must be accomplished, or what flexible mechanisms
should be employed to achieve them. S.547 is about reducing uncertainty
for U.S. business and other entities by ensuring that any reductions
of greenhouse gas emissions that they voluntarily undertake are appropriately
recognized and rewarded.
U.S. business and other entities are not making greenhouse gas reductions
largely because of uncertainty about what future regulatory programs
may be imposed in an effort to stabilize atmospheric concentrations
of carbon dioxide and other greenhouse gases. Many are concerned that,
if the example of the federal Clean Air Act Amendments of 1990 hold
true, action now will not be appropriately recognized, and will result
in increased burdens later. The State of New Hampshire has had direct
experience with this dynamic, inasmuch as the closure of the Pease Air
Force Base in 1989 was not recognized as emission reductions under the
1990 baseline of the latest Clean Air Act reauthorization. This dynamic
applies even if actions now would yield cost savings, because the certain
benefits today might be outweighed by the as-yet-unknown costs imposed
by the future program. S.547 will encourage reductions of greenhouse
gases simply by eliminating the potent disincentive of uncertainty.
How should a credit for early action program be designed? In order
to be most effective, a program to encourage early action must be simple,
flexible, and applicable to a broad array of emissions sources. At the
same time, it needs to reflect sufficient discipline that the integrity
of its credits is never in doubt. A few cornerstones are thus essential.
First, all reductions must be strictly quantifiable and subject to
third party verification. The integrity of the credits hinges on the
processes by which they are quantified.
Second, reductions should not be limited or tied to a particular program,
a particular economic sector, or a particular greenhouse gas. Criteria
for establishing credible baselines, coupled with appropriate, broadly
applicable quantification and verification methodologies, should determine
what constitutes a verifiable ton, not what carbon source the reduction
came from. In the end, all verified tons no matter what their source
or how they were reduced are equal in the eyes of the atmosphere.
Some have also suggested that only certain emission reductions should
count, based, for example, on whether they reflect genuine environmental
intent. I would suggest that this approach unconscionably cripples the
vital linkage between economic and environmental well being that we
cherish and seek to encourage. We should be less concerned with motives,
and more concerned with establishing simple, workable, and effective
quantification and verification protocols.
Third, just as there is a variety of ways to reduce greenhouse gas
emissions, a variety of yardsticks for measuring such reductions may
be necessary. Entities should certainly receive credit for absolute
emission reductions below a historical baseline. In other circumstances,
however, percentage reductions from a defined baseline may be appropriate,
or credit for achieving very-low-emission performance standards. Reductions
provided by a manufacturer's products (e.g., lower emission vehicles)
might also be creditable, although we would need to ensure that they
are not double-counted by purchasers.
Fourth, great care should be taken in placing a limit or cap on the
number of credits available under an early reduction program. Though
some upper bound may ultimately be necessary, it must be balanced against
the fact that such limits could reduce the incentive for entities to
Who should participate? The early credit incentives should apply across
the broadest possible array of participants. In addition to the traditional
industrial and electricity sectors, for example, other sectors and entities
should be allowed and encouraged to participate, including transportation,
residential, commercial and agriculture. Further, the program should
include both carbon sinks and sources, inasmuch as carbon sequestration
may provide significant opportunities for agricultural and forest products
participants such as those operating in the Northern Forest Lands.
In what may be a relatively unusual suggestion, I would recommend that
states and municipalities also be allowed to participate in an early
emission credit program, both because they generate emissions themselves,
but also because they are often left to implement whatever it is the
federal government has decided. Great uncertainty prevails here as well.
In the case of the Acid Rain program, the federal government dealt directly
with emission sources. In EPA's proposed NOx Transport SIP call, states
were assigned emission budgets, and thus had a say in how allocations
were made within their borders.
In an effort to reduce such uncertainty for New Hampshire entities,
including the State itself, we have introduced state legislation to
create a state "registry" of voluntary greenhouse gas reductions. By
having the State of New Hampshire stand with them under some potential
future regulatory reduction requirements, this bill would protect New
Hampshire companies and other entities by reducing the risk that they
might not receive appropriate credit for greenhouse gas emission reduction
activities they already undertook. This measure has received bi-partisan
support in the New Hampshire Legislature, and has been strongly supported
by the state's business community. To date, the bill has passed the
State Senate and has been recommended to the full House by the relevant
Similarly, municipalities should be able to receive credit for verifiable
greenhouse gas reductions. The International Council for Local Environmental
Initiatives (ICLEI), for example, working with 61 (1998 figure) U.S.
towns and cities, has reduced greenhouse gas emissions by 5.4 million
tons per year. In achieving these reductions, incidentally, these ICLEI
communities have saved $27.5 million in energy and fuel costs, and also
reduced 7,000 tons of criteria pollutants. If all verifiable tons are
equal, then these towns and cities should also be credited appropriately.
As this example shows, states and locals have substantial experience
and knowledge infrastructure in achieving cost-saving emissions reductions.
I urge you to tap into that experience in developing S.547.
In conclusion, S. 547, the Credit for Voluntary Reductions Act of 1999
is a crucial measure to remove existing disincentives to early, constructive
environmental action. By providing legal guarantees that responsible
early actors will receive appropriate credit, it will spur entities
to voluntarily undertake cost-effective, multiply-beneficial strategies
that include greenhouse gas reductions. We thus believe that establishing
such an early reduction credit system at this time is in New Hampshire's
best interest, the nation's best interest, and future generations' best
interest, and we urge you to move forward with it aggressively.
Thank you for the opportunity to assist in the creation of a sound,
responsible, early emission credit program. I hope you will continue
to call on the considerable expertise of state and local governments
in developing this ground-breaking initiative.
Good Morning, Mr. Chairman and members of the Committee. My name is Kevin
Fay and I serve as Executive Director of the International Climate Change
Partnership (ICCP), a coalition of U.S. industry representatives and associations,
as well as international associations, interested in the policy development
process with respect to global climate change. We appreciate the opportunity
to appear before the Committee today on the subject of credit for early
action to voluntarily reduce greenhouse gas emissions.
Statement of Kevin J. Fay
International Climate Change Partnership
Before the Senate Committee on Environment and Public Works
June 3, 1999
ICCP was organized in 1991 to provide a forum to address the issue
of global climate change and to be a constructive participant in the
policy debate. We continue to recognize the climate change issue as
an important matter with which governments should be concerned. We are
one of the largest industry coalitions in the world on this issue. A
list of our member companies and associations is attached.
ICCP has consistently stressed the need to provide legally binding
assurances that voluntary actions to reduce greenhouse gas emissions
will be credited in any future mandatory scheme adopted by the government.
Such "credits" should be granted to those companies that achieve verified
reductions between 1990 and the commencement of any mandatory program.
Voluntary efforts to reduce emissions of greenhouse gases now can slow
the rate of growth of emissions and contribute to the longer-term goal
of achieving appropriate greenhouse gas concentration levels. In circumstances
where there is marginal value in an emission reduction investment, granting
credit may provide the incentive for such investments.
Companies that have already taken action or are contemplating doing
so want to ensure that these contributions are not ignored when a mandatory
phase of emission reductions begins. Failure to recognize these contributions
could unfairly force companies to make reductions through increasingly
more costly options. This would have the perverse effect of penalizing
those companies who act early, while potentially benefiting competitors
who save their least costly reductions to respond to regulatory mandates.
Industry's aim is to ensure that these early investments that result
in emission reductions are recognized and "credited." Such credit could
be used to offset future obligations that may arise from any domestic
allocation, cap, tax or permit program or sold to parties unable to
meet their obligations in a cost-effective manner.
ICCP has outlined a series of principles on credit for early action
that we believe should guide the legislative and policy process on this
ICCP Credit for Early Action Principles
Credit for early action programs will require new statutory authority.
Failure to enact a credit program at the Federal level may stop companies
from making commitments now and encourages a patchwork of inconsistent
Federal, state, and local initiatives.
No limit should be placed on the amount of emissions reductions or enhancement
of sinks for which early action credit can be earned.
Credit should be granted for actions resulting in verified emissions
reductions or enhancement of sinks that occur between 1990 and the beginning
of any official budget commitment period, whether or not such actions
were part of a government-sponsored voluntary initiative.
A process should be established to determine and "lock-in" appropriate
baselines for emission reduction activities including facility operations,
product-based initiatives, and enhancement of sinks. Such a process
should be flexible enough to reflect special circumstances, including
unique considerations related to reductions already achieved.
Credits granted prior to a first budget commitment period should be
available without discount as offsets against any greenhouse gas emission
allocation, cap, tax, permit, or other requirement to limit or reduce
greenhouse gas emissions that subsequently may be imposed.
Credits granted prior to a first budget commitment period should be
usable in any national emission budget that may be subsequently imposed.
Credits should remain with the earning entity for use at their discretion.
Emissions reductions or enhancement of sinks produced from participation
in the Clean Development Mechanism, Joint Implementation, or a domestic
emissions trading program should be eligible for early action credit
if they occur prior to a first budget commitment period.
Credits generated from credit for early action programs should be eligible
for emissions trading.
Credit accounts should be updated on an annual basis.
Credit programs should be integrated to ensure consistency and to avoid
In February of this year ICCP sent a letter to each member of the Senate
urging them to co-sponsor S.547, the "Credit for Voluntary Reductions
Act." At that time we stated that the bill was a credible start in addressing
the issue of credit for early action, but we also identified several
issues that needed additional discussion and resolution such as how
to address products that use or emit greenhouse gases and how to deal
As discussions on this issue have progressed, ICCP has come to the
conclusion that, in the current political climate, efforts to enact
credit for early action legislation would be enhanced by pursuing a
simplified approach. We are currently having discussions with Senate
staff on how to address these issues.
The goal of the legislation should be to accomplish three things:
1.Provide legal guarantees to any entity that acts voluntarily to achieve
verifiable reductions related to products, processes, or operations,
that it will not be disadvantaged by a future regulatory program to
control greenhouse gas emissions.
2.Provide a mechanism for verifying any actions that occurred between
1990 and 1999, under Energy Policy Act Section 1605 (b), as part of
the US Climate Change Action Plan, or any other activity in which the
entity is able to demonstrate verifiable reductions.
3.Provide a mechanism for prospective actions which, subject to negotiation
of an agreement with the government, produce verifiable reductions.
We believe that S.547 embodies these three goals.
With respect to past and future reductions, a series of principles
should be delineated to guide the private sector, other entities, and
government officials to use in both verifying past reductions and negotiating
agreements for future reductions.
The intent of the program should be to encourage experimentation on
the part of government, industry, and the environment community, and
not to constrain the ability to develop new and creative methods for
implementing and achieving verifiable reductions.
While this program may require flexibility in terms of the precise
value of the credited reductions, it should be firm that the credits
exist as a matter of legal right.
In order to ensure an open process, it should also provide for public
participation in the verification procedure, notice and comment, and
public disclosure of future negotiated agreements.
The program should not limit government participation by any particular
department or agency. The principles of the bill could be used by any
department or entity to craft verification agreements. These principles,
in our view, should be consistent with those we have previously outlined
and are found in S.547.
For purposes of prior acts, the bill should require all those who seek
credits for prior acts to file a request with the government within
12 months of enactment. The government would be required to certify
the credited reductions within 12 months after submission in a direct
final rule. The direct final rule would be subject to comment and would
take effect unless challenged during the comment period.
It has been suggested that supporting credit for early action legislation
may unwittingly create support for the Kyoto Protocol. We do not agree.
Many companies have already taken action based on the Framework Convention
on Climate Change, which was ratified by the U.S. Senate in 1992. This
agreement called for the US to attempt to stabilize its greenhouse gas
emissions at their 1990 level by the year 2000. Those who have acted
in good faith or who take action prior to any mandatory program should
receive legally binding assurances that their verified reductions will
be credited, regardless of the underlying basis for some future regulatory
The Energy Information Administration of the Department of Energy just
released a report that summarizes voluntary actions taken in 1997. (Executive
Summary is attached.) Similarly, the Environmental Protection Agency
reports annually on the results of efforts under the voluntary Climate
Change Action Plan. These actions amount to hundreds of millions of
metric tons of carbon equivalent emission reductions.
The precedent for crediting early action was established in the 1990
Clean Air Act amendments, when companies who moved early on sulfur dioxide
emissions reductions received additional consideration in the subsequent
sulfur trading program. Relying on this statutory precedent is important
for the climate change issue. However, given the scope of industries
covered and the enormous task to be undertaken, the government should
go on record now by developing the program in advance of any regulatory
Climate change presents a complex environmental challenge. The political
and economic concerns raised in attempts to address the issue are significant
both internationally and here in the United States. Credit for early
action discussions can be neutral on whether it advances or detracts
from the Kyoto Protocol.
The fact remains, though, that the United States is on record in support
of responsible action to address greenhouse gas emissions. We have ratified
the Framework Convention on Climate Change. Congress has funded a variety
of activities under the Climate Change Action Plan and other significant
government programs. It is not unreasonable to request assurance from
the government that these activities, whether past or in the future,
not place the voluntary actors in future regulatory jeopardy.
At this time we are discussing a voluntary and verifiable program.
To the extent that some wish to see much greater detail in this legislation,
to turn the discussion to the design of a pseudo-regulatory program,
we would say that such detail may be unachievable.
We are prepared to work constructively to arrive at a consensus with
other business groups, environment NGOs, and government officials, on
a workable voluntary program.
We applaud Senator Chafee and the co-sponsors of S.547 for a commendable
start. We look forward to working with you to ensure a successful conclusion.
I very much appreciate the opportunity to appear before you today. My
name is Steven Hamburg, I am a scientist with training as an ecosystem
ecologist and currently hold the Ittleson Associate Professorship in Environmental
Studies here at Brown University.
Testimony of Steven P. Hamburg
Ittleson Associate Professor of Environmental Studies
and Associate Professor of Biology,
I would like to testify with regards to Senate bill 547, Credit for
Voluntary Early Action Act. Over the past two decades I have studied
the effects of land-use change on carbon storage in forest ecosystems,
with a particular focus on the old-field forests of New England. I have
participated in the Intergovernmental Panel on Climate Change Second
Assessment as a review team editor focusing on the ecological impacts
of climate change. I am currently actively involved as a principal lead
author in the writing of the IPCC's special report on Land-use/land-cover
change. I have also worked with the Environmental Defense Fund and Trexler
Associates as a consultant on the design of carbon sequestration projects.
Today, I would like to speak to the overall strengths of the concept
of an early action crediting program, and then more specifically to
the carbon sequestration aspects of the bill. The science underlying
climate change and its impacts often baffle people, and as a result
the issue is often dismissed out of ignorance rather than knowledge.
In particular, the complexity of the accounting necessary to verify
changes in carbon storage in natural ecosystems all too often leads
people to dismiss the potential of land-use changes to reduce the increase
in atmospheric concentrations of carbon dioxide.
We know enough about the global carbon cycle to be able to predict
the potential impacts of energy and land-use practices on the rate of
increase in atmospheric carbon dioxide concentrations. This is not to
say we know everything, but rather that our knowledge is sufficiently
robust to allow us to craft public policy that can have a desired outcome,
such as reducing the rate of increase in the atmospheric concentrations
of carbon dioxide. What we do not know is too often the focus of discussions
about the global carbon cycle, and certainly there are aspects of the
cycle that require further elucidation, but this uncertainty is not
central to the viability of the early action legislation. The science
of both climate change and carbon cycling is sufficiently well understood
to provide a solid basis for the enactment of the Credit for Voluntary
Early Action Act.
Our knowledge about carbon cycling is more than adequate to justify
action on changing patterns of energy use and land-use practices. It
is important to remember that the underlying science on which we base
our understanding of the global carbon cycle originates not with the
debate concerning climate change, but far earlier with the advent of
silviculture and oceanography among many other disciplines. Even though
it has only been during the last several decades that large numbers
of scientists have focused on the carbon cycle, our underlying understanding
is based on scientific discoveries accumulated over more than a half
S. 547 is based on sound science, science that includes the use of
land-use changes to reduce greenhouse gas emissions. The Credit for
Voluntary Early Action Act attempts to encourage energy users and landowners
to think about how they can reduce their emissions while at the same
time serving their own direct interests. The proposed legislation is
designed to reduce the potential penalty involved in taking action that
reduces greenhouse gas emissions. Without such legislation not only
would our country not be recognizing the threat that climate change
poses to our well being, but we would be making the situation even worse.
If corporations and landowners do not know what year will be used as
a baseline for any future domestic greenhouse gas reductions legislation,
then any action to reduce emissions today could create the need for
deeper cuts in the future. This disincentive keeps people from acting
and we need to reverse the situation, S. 547 would do that. Without
this legislation it can be argued that there is advantage for most companies
and land owners to allow emissions to increase unchecked, as it would
effectively position a company or landowner should mandated cuts come
into play. If Congress does not provide incentives to reduce greenhouse
gas emissions, the lack of incentives could actually accelerate the
rate of increase in greenhouse gas emissions, making any future reductions
even more difficult. The sooner there are incentives for reducing greenhouse
gas emissions, the less need there will be for dramatic reductions later.
The proposed act will make long-term planning viable and economically
advantageous, whether it is in the energy sector or the land-use arena.
Since other members of the panel will be testifying today on the energy
side of the bill I will focus my remaining remarks on the land-use side
of the Act. Tens of thousands of landowners across America make decisions
every year about what to do with land they own. Should they cut timber,
use no-till agriculture or do nothing, let nature run its course. Each
of these decisions has an impact on the global carbon cycle, albeit
very small. In the aggregate the impact of all of these decisions could
have a significant effect on the global carbon cycle. Since, there is
consensus that we want to encourage America's landowners to make wise
land-use decisions, decisions that will insure the sustainability of
our natural resources for generations to come, S.547 makes a lot of
sense. S. 547 could provide a powerful tool towards helping landowners
make sustainable long-term land-use decisions.
As a landowner I get regular solicitations exhorting me to contact
the soliciting company to find out how much the timber on my land is
worth. Many of my neighbors sell their timber in just such a shortsighted
manner. Yet, with a bit more planning and management it would be possible
to increase both the profit of my neighbors and the productivity of
their land. Maximizing carbon storage on the land is a very good metric
for examining long-term sustainable management of America's lands. If
we give people an incentive to maximize carbon storage on the land,
what we are doing is encouraging them to remove resources in a conservative
manner. If this bill if crafted wisely (I will come back to some proposed
language) we can reduce the build up of greenhouse gases in the atmosphere
at the same time as increasing use of best management practices, and
better yet at little if any cost to the taxpayers. Some people may be
concerned that by conserving carbon we will be reducing fiber, timber
or agricultural production, but that is very unlikely. The value of
carbon credits will not be sufficiently great to get people to take
productive land out of production, but it is very reasonable to expect
the value of carbon credits to be high enough to get people to manage
productive lands a bit more conservatively. S. 547 would provide people
with the potential to get a bit of extra revenue from managing trends
All to often we know what we should do, but we just don't quite get
around to doing it. The proposed legislation will help give people a
little extra push. Since, the bill involves only voluntary actions it
does not require people to take actions they do not want to take. I
have heard an argument against the bill based on an interpretation of
the proposed legislation that assumes that landowners would be given
the opportunity to benefit from intensifying land management, but this
need not be the case. It is not difficult to write language for inclusion
in S. 547 which requires rigorous carbon accounting, which means clearing
old-growth forest or intensifying agricultural production will not yield
Specifically I would like to see that the land-use aspects of this
legislation meet three objectives:
a. low transaction costs
b. carbon correct accounting
c. a requirement of additionality
A legislative framework that allows transaction costs to be kept low will
facilitate greater participation, particularly among small landowners
that own the bulk of America's land. At the same time it is critical that
there is carbon correct accounting incorporated in the bill. These two
requirements could create tension, but in fact are compatible. We need
to be comfortable in saying that we are crediting only net increases in
carbon and not simply carbon being fixed though photosynthesis. This is
an important point, so let me take a moment to explain. Trees take atmospheric
carbon and convert it into organic compounds through the process of photosynthesis.
The annual amount of carbon that is removed from the atmosphere through
photosynthesis is very large, an order of magnitude greater than annual
fossil fuel emissions. Yet, almost all of that photosynthetically fixed
carbon is released back into the atmosphere through respiration, so only
a small amount of net carbon stays on the land. It is the net carbon sequestered
that is potentially creditable. If we credit more than the amount of net
carbon sequestered on the land then we have not accomplished anything
relative to addressing the atmospheric build-up of greenhouse gases. I
have seen proposed language for this bill that credits gross, not net,
Since, some of that net carbon is the product of past actions, and
will accumulate with or without this bill, the early action bill should
reward only increases in net carbon that are attributable to decisions
made after the enactment of this bill. We want the bill to encourage
more conservative use of the land, use that will increase the carbon
sequestered on the land.
How do we meet the three criteria I have listed above? I have attached
legislative language that I think meets these three objectives in an
operationally viable and clear manner. The language is relatively technical,
but I believe it is effective in meeting the criteria I spoke about
earlier. On the land-use side we have the advantage of 100 years of
accumulated knowledge in the forestry profession that we can call upon
to develop viable measurement approaches to quantifying the amount of
net carbon sequestered. Measuring the amount of carbon in a tree or
in the soil is not magic, but rather straightforward science, well-established
In the language I have given you we have attempted to exploit what
we know in order to establish a system that requires a landowner to
measure a minimal number of variables in the field. We have assumed
that getting it "right" on each parcel of land is important, but even
more important is insuring that the aggregate net carbon credited is
accurate. I believe the attached language does just that.
In summary, I believe the Credit for Voluntary Early Action Act can
increase wise stewardship of our natural resources while greatly reducing
the increase in atmospheric concentrations of carbon dioxide. It is
important to get started on addressing climate change and the proposed
legislation is a very logical first step. I would be happy to work with
you or your staff on specific language for inclusion in this bill. Thank
you for the opportunity to testify before you today.
INCREASES IN CARBON STOCKS
(A) In general._An early action agreement may provide that a participant
shall be entitled to receive greenhouse gas reduction credit for the
net increase in carbon stocks during the credit period within ecosystems
on land owned by the participant that are additional to that which would
have occurred as a result of current and projected practices in the
absence of this legislation. In the case of permanent protection of
mature primary forest from logging activity after the date of enactment
of this Act, greenhouse gas reduction credits shall be equal to fifty
percent (50%) of the carbon stock in above and below ground live biomass,
measured at the end of the credit period.
d. Additionality. Except for lands on which there is reforestation,
afforestation, or permanent protection from logging activity, the amount
of the carbon stock increase that is considered additional to that which
would have occurred as a result of current and projected practices in
the absence of this legislation shall be determined as the difference
between the net increase in carbon stocks during the credit period on
land owned by the participant and the product of the number of acres
of land owned by the participant and the average per acre change in
carbon stocks during the credit period in similar forests within the
region. If the average per acre change in carbon stocks during the credit
period in similar forests within the region is less than zero, it shall
be regarded as zero for the purpose of this calculation. For purposes
of this analysis regulations promulgated under section 4(c) shall establish
average rates of change of carbon stocks by forest type, productivity
class, age, and region, taking into account the most recent forest inventory
and analysis data. All analysis of such average rates of change of carbon
stocks shall exclude all submerchantable timber. In the case of reforestation,
afforestation, or permanent protection from logging activity after the
date of enactment of this Act, the full net increase in carbon stocks
during the credit period shall be considered additional to that which
would have occurred as a result of current and projected practices in
the absence of this legislation.
e. Leakage. The net increase in carbon stocks eligible for greenhouse
gas reduction credit shall be calculated by deducting any leakage of
benefits due to related greenhouse gas emissions or reduced carbon stocks
on land not covered by the early action agreement. If an early action
agreement results in a reduction in timber supply, the amount of the
deduction shall be the product of the amount of reduction in timber
supply and the average carbon emissions associated with supplying similar
timber. The deduction for related greenhouse gas emissions associated
with land management practices shall include, but not be limited to,
emissions from fossil fuel consumption, fertilizer application and land
preparation activities deemed significant according to the rules developed
pursuant to Section 4 (C) of this Act.
Leakage of benefits will be assumed to be zero in the case of:
a) Lands on which there is natural regeneration or establishment of
plantations leading to afforestation or reforestation of agricultural
lands in regions where on a net basis the forest type being regenerated
is not being converted to agricultural lands during the credit period.
b) Improved forest management practices that increase carbon stocks
while maintaining production of timber, fiber, and/or energy, as applicable,
from the participant's lands.
c) A demonstration that the rate of increase in carbon stocks in the
forests of the region has increased for the last period for which such
data is available and the aggregate output of all timber, fiber, and
fuel producing mills and facilities in the region has not declined,
subtracting any production which relied on imports of timber or fiber
from outside the region.
d) Permanent protection of forests from logging activity after the date
of enactment of this Act.
a) Only private lands are eligible to participate in the program established
by this section.
b) Landowners must enroll their entire forest land base to participate
in the program established by this section. Landowners may exclude lands
from enrollment if the dominant use of the property is ecosystem preservation
and there are no timber management activities occurring on the property.
Notwithstanding the preceding sentence, a participant may enroll preservation
lands if it wishes to do so. If property excluded from consideration
under this provision comes under active timber management it must be
included in all future carbon accounting. If a participant purchases
land during the agreement period, then the net change in carbon stocks
on that land must also be included in the applicable agreement. A participant
owns land if it owns a controlling interest in the timber on the land.
Participants may exclude from enrollment tracts of lands smaller than
50 acres that are non-contiguous with other land owned by the participant.
Changes in carbon stocks on all lands enrolled need to be included and
for those lands with a net loss of carbon stocks the loss needs to be
subtracted from the creditable gain in carbon stocks calculated under
c) For landowners undertaking improved forest management practices,
including improved forest management in conjunction with reforestation,
a minimum parcel size of 5,000 acres is required to enroll as an individual.
Otherwise, landowners must pool their lands together with other landowners
for purposes of enrolling in the program. Such landowner pools must
have a minimum enrolled acreage of 5,000 acres. These requirements for
pooling and minimum tract size do not apply to landowners who enroll
lands where no timber harvests will be conducted during the early action
period and where activities will consist of reforestation on agricultural
lands and/or improved agricultural practices. To enroll in a landowner
pool, individual landowners must enroll all their land into an early
d) Rules issued under this Act shall establish the age at which each
forest type described above produces merchantable pulpwood, sawtimber
or other timber products commonly sold by landowners in the region.
Only lands on which the forest is older than this minimum age will be
eligible, except for lands on which reforestation and afforestation
takes place during the early action period. For forest management units
(each not to exceed 100 acres) with multiple tree age cohorts, for purposes
of this act, the age of the forest is the oldest age cohort representing
at least 20% of the standing timber.
a) The participant may elect to count the greenhouse gas reduction
credits accruing from their early action agreement based on the number
of "ton-years" that carbon stock increases have been maintained. Each
"ton-year" will be awarded a fraction of one ton of credit. The fraction
shall be determined, by rule, based on the ratio of the reduction in
greenhouse gas forcing over a 100 year time period as a function of
the period during which a carbon stock increase of one ton has been
maintained, to the reduction in greenhouse gas forcing over a 100 year
time period from the permanent avoidance of the emission of one ton
of carbon, taking into account the most recent findings of the Intergovernmental
Panel on Climate Change.
b) If the participant elects not to count the greenhouse gas reduction
credits accruing from their activities in "ton-years", the participant
shall receive credit equal to the participant's net increase in carbon
stocks during the credit period, as determined under this section. Under
this election, if at any time after end of the credit period, and before
the land covered by the agreement is accounted for under a mandatory
emissions reduction program, the stock of 6 carbon on the land covered
by the agreement is less than the stock of carbon at the end of the
credit period, the participant shall retire a number of greenhouse gas
reduction credits equal to the difference between the two amounts.
(3) Land stewardship
a) In order to prevent the establishment of forests in areas that currently
support natural vegetative communities other than forests, no credits
will be granted for afforestation of areas historically not forested
unless those areas have been in cropland since 1990.
b) No credits shall be granted for off-site increases in carbon stocks
including but not limited to those associated with paper and other wood
products and landfills.
c) Credits for carbon stock increases from land-use activities should
encourage wise stewardship of land, including land used in production
of forest and agricultural products, land providing environmental service
or land set aside for the preservation of natural areas. All lands enrolled
in a program for early action carbon credits must adhere to best management
practices as specified on a regional or state basis by the appropriate
federal or state agency.
(4) No more then 20% of the greenhouse gas reduction credits allocated
under this Act shall be awarded for carbon stock increases under this
(D) Monitoring, Reporting and Verification
(1) The rules issued pursuant to section 4(C) shall include monitoring
guidelines that, at a minimum, provide:
a) Tables of estimated greenhouse gas emissions associated with land
management activities that result in a significant indirect increase
in greenhouse gas emissions (e.g. fertilizer production, herbicide production,
fossil fuel consumption).
b) Guidelines that identify all carbon stocks on a participant's lands
that may be decreasing during the credit period. All carbon stocks that
may be decreasing must be monitored. Monitoring of carbon stocks that
are increasing is at the discretion of the participant.
c) Guidelines that ensure accurate and transparent monitoring based
on statistically robust inventory, soil sampling, ecological survey,
and other applicable scientific techniques.
d) Requirements to perform monitoring in the first year of the early
action agreement, the last year of the credit period, and at least once
every three years during the credit period. Procedures for estimating
baseline carbon stocks on the participant's lands included in an early
f) Procedures to allow appropriate estimation of carbon stocks using
tables and models derived from USES Forest Inventory and Analysis data
for the appropriate region, forest type, age, stand management history,
and site productivity for tracts of land included in an early action
(2) The rules issued pursuant to section 4.(C). shall include reporting
guidelines that, at a minimum, provide that:
a) Participants shall report claimed net increases in carbon stocks
during the credit period to the appropriate government agency, which
will then evaluate the participants' compliance with the guidelines.
If not in compliance, the participant will be notified and advised what
remedial actions are needed. Participants may not receive greenhouse
gas reduction credits until they are in compliance with the guidelines
issued under this Act.
b) Each participant's report must be supported by a report from a recognized
independent third party auditor. The auditor must verify the carbon
credits using a statistically robust evaluation of a valid subsample
of the participants lands.
(3) Participants who own less than 50,000 acres will be eligible for
monitoring and verification assistance.
(1) Afforestation - Conversion of non-forest to forest on lands that
have, historically, not contained forests and did not in 1990.
(2) Reforestation - Conversion of non-forest to forest on lands which
had, historically, contained forests but which had been converted to
some other use as of 1990.
(3) Carbon Stocks - Living biomass carbon, dead biomass carbon, and
soil carbon (organic and mineral soils) .
(4) Baseline Carbon Stocks - the average amount of carbon stocks (in
tons carbon) estimated to be present on a participant's land during
the participant's base period.
(5) Ecosystems - include above and below-ground living biomass, soils
(organic and mineral), and necromass. Forest -- Land at least 10 percent
occupied by forest trees of any size or formerly having had such tree
cover and not currently developed for non-forest use. Lands developed
for non-forest use include areas for crops, improved pasture, residential,
or administrative areas, improved roads of any width, and adjoining
road clearing and powerline clearing of any width. The land must be
a minimum of one acre in area. Roadside, streamside, and shelterbelt
strips of timber must have a crown width of at least 120 feet to qualify
as forest land; and unimproved roads, trails, streams, and clearings
within forest areas are classified as forest land if they are less than
120 feet wide (USDA Forest Service 1972).
(6) Tree -- A woody plant usually having one or more perennial stems,
a more or less definitely formed crown of foliage, and a height of at
least 12 feet at maturity.
(7) Mature primary forest -
(8) Region - Region shall be defined by the US Forest Service Inventory
and Analysis survey unit(s) in which the participant's lands are located.
(9) Ton-year- One ton-year represents the maintenance of a carbon stock
of one ton for one year.
(10) Best management practices - sustainable land-management practices
that conserve resources while maintaining long-term productivity
I am pleased and honored to be allowed to present testimony in support
of Senate Bill 547, a bill to encourage reduction of greenhouse gases
by providing credit for voluntary mitigation actions. As noted, I am currently
Chair of the Massachusetts State Commission for the Conservation of Soil,
Water and Related Resources. I am also the immediate past President of
the Massachusetts Association of Conservation Districts and am currently
the Massachusetts Director of the National Association of Conservation
Districts, a member of the Legislative Committee for the National Association
of Resource Conservation and Development Councils and Partnership liaison
member of the United States Department of Agriculture/Natural Resources
Conservation Service Team on Carbon Sequestration. I would emphasize that
my testimony here today reflects my expertise, experience and ongoing
work at state, regional and national levels on behalf of the Conservation
TESTIMONY OF PEGGY FANTOZZI 6/3/99 RE: Senate
We, the conservation districts are strongly supportive of Senate Bill
547 and applaud its adoption of a voluntary incentive-based problem
solving approach We, as your constituent based, local connection to
non-regulated and regulated landowners, business operators and land
managers, recognize the value of and need for this type of approach.
The Conservation Partnership consisting of USDA/Natural Resources Conservation
Service (NRC S), state environmental agencies and local volunteers have
been practicing implementation of best land use practices and delivery
of technical assistance throughout the country for more than 60 years.
Senate Bill 547 as proposed
--will diminish the regulatory and financial risk for voluntary, "common
good" actions initiated by corporate leaders, business owners, farmers
and foresters. The passage of this bill will allow industry to put a
real value on credits, rather than current speculative value.
--puts the marketplace in the driver's seat to determine new cost-effective
ways to reduce greenhouse gas emission and sequester more carbon . The
passing of this bill will result in a market based/market driven commodity
that has real value to the buyer and to the seller. Passage of this
bill will lessen a governmental role both in terms of regulation and
--provides direct one for one credit to an entity if it reduces its
aggregate emissions from U.S. sources below the applicable baseline
and/or a one for one credit if an entity increases its net sequestration
above the applicable sequestration baseline. The passage of this bill
would provide investment security and promote a land use ethic to all
involved in the process.
--recognizes the need to require that government credits are issued
for verifiable and legitimate actions that contribute to climate stabilization.
The passage of this bill would require performance standard evaluation
based on scientific documentation and monitoring from credible sources.
The Conservation Partnership, recognizing NRCS for its technical expertise,
is ready to serve in this capacity now as evidenced by the information
provided in the attachments to this testimony and would be the perfect
connection given its existing local delivery system linked to state
and federal agencies.
--recognizes the need and opportunities for domestic and oversees sequestration
--provides the mechanism whereby businesses and landowners can serve
their own economic self-interest while bringing about environmental
improvements and promoting a sustainable land use ethic for all.
--creates opportunities to deal with an existing problem in a creative
and flexible manner. Passage of this bill does not establish federal
performance standards but allows for local, state and regional climate
(soils, vegetation, rainfall and temperature) characteristics to be
evaluated for credit in the verification process. This is significant
and necessary for state support, recognition of state efforts to date
(like the 1998 Coalition of Northeast Governors conference) and scientific
This bill does not
- promote regulation
--inhibit private enterprise
--require linkage to existing or proposed international agreements
--restrict private business options
--subsidize commercial interests
--create additional bureaucratic layering.
Although we strongly support Senate Bill 547 as proposed, we believe
that it could be significantly improved by inserting language that specifically
1) urges the President to
--recognize a leadership role for USDA/NRCS and the Forest Service
to share in setting guidelines for the Voluntary Credit System. These
agencies should rely on their internal technical expertise as well as
their Partnership capabilities and connection to the private sector
--recognize technical expertise within USDA/NRCS, EPA, NOAH, DOI/Forest
Service, etc in the development of region and/or state specific guidelines
for credit validation, verification and monitoring
--instruct federal agencies to revisit their own land management policies
and practices to encourage minimization of greenhouse gas emissions
and maximization of best land use practices for carbon sequestration
on federal lands as well as other public lands that receive federal
2) recommends Congress to allocate funding for regionally located Demonstration
Projects partnering greenhouse gas emitters, landowners providing carbon
sinks, and federal technical expertise to provide preliminary scientific
In addition to this direct testimony, I would call your attention to
the attachments provided. Included are letters of support for Senate
Bill 547 from the National Association of Conservation Districts, the
National Association of Resource Conservation and Development Councils
and USDA/Natural Resources Conservation Service, with general information
about the Conservation Partnership also provided.
If you have any questions on any items of my testimony or the attachments
please let me know so that I can provide clarification and follow up.
Also if I may be of assistance to you or your staff in following through
with the recommendations made please let me know.
In closing, I would take this opportunity to thank the Committee and
the authors and sponsors of Senate Bill 547 for their efforts in bringing
this issue forward. I would also like to express the sincere appreciation
of the Conservation Partnership here in New England, the East Region
and across the nation for Senator Chafee's support of our efforts and
his constant championing of the environment for its own sake as well
as for the common good. He and his staff are to be commended for their
relentless efforts to do the right thing for the common good in a way
that makes common sense. I have family ties to Bristol and Providence
and therefore have taken pride in Senator Chafee's service to Rhode
Island but as a resident of Massachusetts I can tell you that I am honored
to lay claim to him as a New Englander and as a United States Senator.
I say thank you for myself, for my family, for this region and for future