CLIMATE/ENERGY BILL WILL PROTECT FORESTS – BUSINESS & ENVIRONMENT COALITION

Energy companies, enviro groups unite on int'l forest offsets
Noelle Straub, May 20, 2009 (NY Times)

LATE BREAKING: FINAL VOTE ON HOUSE ENERGY/CLIMATE LEGISLATION LIKELY THURSDAY NIGHT.

SUMMARY
Consensus Principles on International Forests for U.S. Climate Legislation, an Avoided Deforestation Partners Unity Agreement, calls on the U.S. to lead in domestic and international solutions to end global deforestation and designates 14 steps necessary to do so.

Most relevant at the present moment, it supports the deforestation provisions in H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), co-written by Representative Henry Waxman (D-Calif), Chair of the House Energy and Commerce Committee and Representative Ed Markey (D-Mass), Chair of the House Energy Subcommittee and currently undergoing mark up in preparation for being submitted to the full House of Representatives.

The partners say ending deforestation will turn back the climate crisis, enhance national security, protect the earth’s biodiversity and reduce world poverty.

The Avoided Deforestation Partners are: American Electric Power, Conservation International, Duke Energy, El Paso Corporation, Environmental Defense Fund, Marriott International, Mercy Corps, National Wildlife Federation, Natural Resources Defense Council, PG&E Corporation, Sierra Club, The Nature Conservancy, The Walt Disney Company, Union of Concerned Scientists, Wildlife Conservation Society and Woods Hole Research Center.

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The partners still have differences but agreed on 2 important, long-contentious issues: (1) They called for using 5% of the greenhouse gas emission (GhG) allowances provided in ACESA’s cap&trade system to prevent tropical deforestation and protect international forests so they can remain GhG sinks where emissions are absorbed and stored. This would reverse a process presently accounting for ~20% of world GhGs. (2) Companies should receive offset credits toward meeting emissions caps for actions that protect against deforestation. The tradable allowances could generate $12-to-$15 billion for international forest conservation by 2015.

The 5% set aside, estimated at a value of approximately $3.4 billion/year, will affect a crucial area where GhGs are increasing and the forests’ capacity to sequester GhGs is falling off. One expert estimated the net GhG reduction will match the emissions of a nation the size of France or Spain.

Though the shape of the final provision is not yet certain, the percent of allowances dedicated to forest protection diminishes over time. It will be 5% through 2025, 3% through 2030 and 2% through 2050. It is estimated that by 2020 the program will have cut as many emissions as 10% of U.S. 2005 emissions. From 2026 through 2030, 3 percent of allowances would be allocated to the program, and from 2031 to 2050, the amount would be reduced to 2 percent.

The landmark agreement on protections against deforestation recommends the Executive Branch should be given wide discretion to spend the funds generated by the 5% of emissions allowances and recommends 7 ways they can be used to protect the forests and assist developing nations build the capacity to do so:

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(1) Fund programs to assist developing nations to manage their forests and prepare them for participation in international emissions trading markets. This requires (a) building national forest emission baselines, (b) improving forest governance, (c) making programs transparent and growing public participation; (d) institution building; (e) establishing safeguards for losers in the transition; (f) land tenure and judicial reforms; (g) developing revenue sharing systems; and (h) building systems to measure, report and verify.
(2) Incentives to make the GhG reductions high-quality, verified and immediate with U.S. government financed pay-for-performance programs designed to smoothly transition the developing nations to efficient to market-based systems.
(3) Programs to conserve existing forests, including payments for such conservation to counter new and shifting deforestation pressures.
(4) Programs to improve forest management and land-use policy including (a) support for conservation trust funds and management policies/actions (including community-based programs that protect the role, rights and interests of forest-dependent communities), (b) a fight against international illegal logging and trade in products from illegal logging, (c) changes in planning and land management practices, and (d) building New Energy reduce energy uses of forests.
(5) Upfront financing, including loans, for GhG reduction action, including policy reforms and governance improvements in high risk countries where financing is not readily accessible.
(6) Pilot and experimental activities like peat land and other ecosystem conservation plans.
(7) Rewards for early action ahead of a specified date when cap&trade system regulation kicks in.

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COMMENTARY
The necessary 14 steps:
(1) Include the world’s forests in the concerns of federal energy and climate change legislation because deforestation and other land-use decisions account for ~ 20% of
global greenhouse gas emissions (GhGs).
(2) A science-based emissions reduction plan must include international forest protections.
(3) 5% of cap&trade allowances should be set aside to cut international forest emissions by funding efforts in developing countries to build emissions reduction capacity.
(4) Allow developing nations to profit from participation in U.S. cap&trade markets.

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(5) Support the development of national, environmentally sound, measurable, reportable and verifiable strategies in Forest Countries.
(6) Make rules flexible for small Forest Countries to bring them into the U.S. cap&trade system as readily as possible and even before all the rules are written.
(7) Require Forest Countries to establish baselines that serve as foundations for compliance.
(8) Set a timetable for baseline verification, (a) 5 years for major emitters, (b) 8 years for small emitter developing countries and special accommodations for the least developed countries.

Reducing Emissions from Deforestation in Developing Countries (REDD) is expected to be a key addition to the international Kyoto treaty successor agreement to be finalized at the Copenhagen world summit on climate change in December. (click to enlarge)

(9) Limit non-U.S. cap&trade emissions reductions, quantified in tons of GhGs, but do not limit allowances tradable between nations with “strong, credible and domestically enforceable caps” because that will contribute to the fight against global climate change.
(10) Reward early action through incentives.
(11) Make forest protection emissions reductions tradable assets in international markets.
(12) Put environmental protections of critical ecosystems and biodiversity in place and make the emissions reductions additional, permanent, registered and transparent.

Their interests must be protected, their rights respected. (click to enlarge)

(13) Protect the rights and interests of indigenous peoples, other forest dependent communities and the rural poor. See that revenues are channeled to them. Prohibit the use of tradable emission reductions by nations the U.S. State Department determines has failed to adopt and implement social safeguards, legal systems and policies. Require regular Department of State reports on how U.S. and global climate policies are affecting indigenous peoples, other forest dependent-communities and the rural poor.
(14) Prepare developing nations for economic and environmental impacts and responsibilities by 2012 (when the U.S. emissions market opens) with yearly (2009, 2010, 2011) Congressional appropriations to assist developing countries create baselines and prepare to participate.

Reducing Emissions from Deforestation in Developing Countries (REDD) is expected to be a key addition to the international Kyoto treaty successor agreement to be finalized at the Copenhagen world summit on climate change in December. Like the ACESA provision, it is designed to stop deforestation in developing nations through free market mechanisms. This provision in the Waxman-Markey legislation puts the U.S. one step closer to the leadership role the Obama administration wants to take at Copenhagen.

It's happening faster and faster. (click to enlarge)

QUOTES
- Frances Beinecke, president, Natural Resources Defense Council: "This investment will pay dividends in the future, and it will help make a sizable dent in reducing these emissions…"
- Michael Morris, CEO, American Electric Power: "It's a very constructive and customer-friendly way to go about it."