25x’25

The 25x’25 Alliance today issued a list of proposed amendments to the American Clean Energy and Security Act (HR 2454) that the organization said are needed to maximize the benefits that agriculture and forestry can provide in the cap-and-trade program outlined in the measure.

The amendments address deficiencies in the bill, which in its current form does not insure a workable offset program, to the detriment of both the capped sectors and the uncapped agriculture and forestry sectors. They provide the detail needed for a program that can deliver significant near-term biological sequestration and greenhouse gas reduction services.

HR2454, also known as the Waxman-Markey bill, must fully recognize that agriculture and forestry are uniquely positioned to deliver a high volume of low-cost offsets, particularly during the early years of a cap and trade program when a quick start is most urgent. At the same time, agriculture and forestry have much to gain from this opportunity in the form of a new revenue stream. Both solutions from, and benefits to, the sectors were closely examined by the  25x’25 Carbon Work Group, a panel of 50 experts who issued in April The Role of Agriculture and Forestry in a Reduced Carbon Economy: Solutions from the Land, a study of policy recommendations and imperatives that can maximize the potential of land-based offsets to combat climate change.

The amendments, which were aired during a Farm Foundation forum at the National Press Club this morning by Carbon Work Group Chairman Nathan Rudgers, a former New York state agriculture commissioner and a member of the 25x’25 National Steering Committee, address multiple areas within the Waxman-Markey bill, including:

• Domestic offsets must have identical characteristics and risks, i.e. fungibility, with each other and with allowances.
• Sequestration offsets must be for a contracted duration, with a suggested “permanence” of fifty years.
• The risks of unintentional reversals and leakage must be fully managed at a program-level, not at a project level. (At the same time, offset providers must be held accountable for any and all intentional reversals.)
• Biological sequestration offsets must be credited at a discounted rate so that the difference between the value of the full offset and a discounted offset is the source of funds to manage all risks of reversal, such as from a forest fire.
• The measure must recognize the abundant offset protocols and methodologies that have been previously developed under other programs by allowing the program administrator to quickly establish a list of pre-approved project types.
• The bill must direct the program administrator to devise protocols, methodologies, procedures, registry requirements, verification requirements, and any other relevant process issues to be as operationally lean as possible and reduce overhead costs of compliance.
• USDA should be the lead agency to assume responsibility for the majority of farm and forestry offset functions.
• Domestic offset providers from the agriculture and forestry sectors should be treated equally under the Strategic Reserve, a price management mechanism, which sets aside extra permits that can be allocated to prevent unexpected allowance-price fluctuations.
• Agriculture and forestry stakeholders currently engaging in land management practices that provide offsets – “early actors” – should be recognized under the cap-and-trade program and specifically protected against any bias that could accrue relative to other offset providers.

It is critical that the current legislation be amended to provide the kind of necessary detail that will insure the viability of the cap and trade system’s offset components. The 25x’25 Alliance stands ready to assist stakeholders and policy makers in maximizing the benefits of an offset program.

25x'25 Carbon Initiative Agriculture, Climate Change, Emissions, Forestry, House of Representatives, USDA