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 century.
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 wisely.
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 carbon credits.
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, carbon.
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 science.
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.
(B) Calculations--
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.
(C) Limitations--
(1) Coverage.
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 this section.
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 action agreement.
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.
(2) Durability.
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 section.
(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 action agreement.
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 agreement.
(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.
DEFINITIONS
(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