Carbon incentives program to achieve supplemental greenhouse gas emission reductions on private forest land

(a)

Definitions

In this section: (1)

Avoided deforestation agreement

The term avoided deforestation agreement means a permanent conservation easement that— (A)covers eligible land that— (i)is enrolled under a climate mitigation contract; and (ii)will not be converted for development; and (B)is consistent with the guidelines for— (i)the Forest Legacy Program established under section 7 of the Cooperative Forestry Assistance Act (16 U.S.C. 2103c); or (ii)any other program approved by the Secretary for use under this section to provide consistency with Federal legal requirements for permanent conservation easements. (2)

Climate mitigation contract; contract

The term climate mitigation contract or contract means a contract of not less than 15 years that specifies— (A)the eligible practices that will be undertaken; (B)the acreage of eligible land on which the practices will be undertaken; (C)the agreed rate of compensation per acre; and (D)a schedule to verify that the terms of the contract have been fulfilled. (3)

Eligible land

The term eligible land means forest land in the United States that is privately owned at the time of initiation of a climate mitigation contract. (4)

Eligible practice

The term eligible practice means a forestry practice, including improved forest management that produces marketable forest products, that is determined by the Secretary to provide measurable increases in carbon sequestration and storage beyond customary practices on comparable land. (5)

Program

The term program means the carbon incentives program established under this section. (6)

Secretary

The term Secretary means the Secretary of Agriculture. (b)

Supplemental greenhouse gas emission reductions in the United States

(1)

In general

The Secretary shall establish a carbon incentives program to achieve supplemental greenhouse gas emission reductions on private forest land of the United States. (2)

Financial incentive payments

(A)

In general

The Secretary shall provide to owners of eligible land financial incentive payments for— (i)eligible practices that measurably increase carbon sequestration and storage over a designated period on eligible land, as specified through a climate mitigation contract; and (ii)subject to subparagraph (B), permanent avoided deforestation agreements on eligible land covered under a climate mitigation contract. (B)

No agreement required

Eligibility for financial incentive payments under a climate mitigation contract described in subparagraph (A)(i) shall not require an avoided deforestation agreement. (c)

Performance of supplemental reductions

In carrying out the program, the Secretary shall report under subsection (f) on progress toward reaching the following levels of carbon sequestration and storage through climate mitigation contracts: (1)100,000,000 tons of carbon reductions by 2020. (2)200,000,000 tons of further carbon reductions by 2030. (d)

Program requirements

(1)

Contract required

To participate in the program, an owner of eligible land shall enter into a climate mitigation contract with the Secretary. (2)

Program components

In establishing the program, the Secretary shall provide that— (A)funds provided under this section shall not be substituted for, or otherwise used as a basis for reducing, funding authorized or appropriated under other programs to compensate owners of eligible land for activities that are not covered under a climate mitigation contract; (B)emission reductions or sequestration achieved through a climate mitigation contract shall not be eligible for crediting under any federally established carbon offset program; and (C)compensation for activities under this program shall be set at such a rate so as not to exceed the net estimated benefit an owner of eligible land would receive for similar practices under any federally established carbon offset program, taking into consideration the costs associated with the issuance of credits and compliance with reversal provisions. (3)

Reversals

(A)

In general

In developing regulations for climate mitigation contracts, the Secretary shall specify requirements in accordance with this paragraph to address intentional or unintentional reversal of carbon sequestration during the contract period. (B)

Intentional reversals

If the Secretary finds an owner of eligible land violated a climate mitigation contract by intentionally reversing a practice or otherwise intentionally failing to comply with the contract, the Secretary shall terminate the contract and require the owner to repay any contract payments in an amount that reflects the lost carbon sequestration. (C)

Unintentional reversal

If the Secretary finds an eligible practice has been unintentionally reversed due to events outside the control of the owner of eligible land, the Secretary shall reevaluate and may modify or terminate the climate mitigation contract, after consultation with the owner, taking into consideration lost carbon sequestration and the future carbon sequestration potential of the contract. (e)

Incentive payments

(1)

Regulations

Not later than 1 year after the date of enactment of this Act, the Secretary shall issue regulations that specify eligible practices and related compensation rates, standards, and guidelines as the basis for entering into climate mitigation contracts with owners of eligible land. (2)

Set-aside of funds for certain purposes

(A)

In general

Not less than 35 percent of program funds made available under this program for a fiscal year shall be used— (i)to provide additional incentives for owners of eligible land that carry out activities and enter into agreements that protect carbon reductions and otherwise enhance environmental benefits achieved under a climate mitigation contract; and (ii)to develop forest carbon monitoring and methodologies that will improve the tracking of carbon gains achieved under the program. (B)

Use

Of the amount of program funds made available for a fiscal year, the Secretary shall use— (i)at least 25 percent to make funds available on a competitive basis to compensate owners for entering avoided deforestation agreements on land subject to a climate mitigation contract; (ii)not more than 10 percent to provide incentive payments for additional management activities that increase the adaptive capacity of land under a climate mitigation contract; and (iii)not more than 2 percent for the Forest Inventory and Analysis Program of the Forest Service to develop improved measurement and monitoring of forest carbon stocks. (f)

Program measurement, monitoring, verification, and reporting

(1)

Measurement, monitoring, and verification

The Secretary shall establish and implement protocols that provide monitoring and verification of compliance with climate mitigation contracts, including both direct and indirect effects and any reversal of sequestration. (2)

Reporting requirement

At least annually, the Secretary shall submit to Congress a report that contains— (A)an estimate of annual and cumulative reductions achieved as a result of the program, determined using standardized measures, including measures of economic efficiency; and (B)a summary of any changes to the program that will be made as a result of program measurement, monitoring, and verification. (3)

Availability of report

Each report required by this subsection shall be available to the public through the website of the Department of Agriculture. (4)

Program adjustments

At least once every 2 years the Secretary shall adjust eligible practices and compensation rates for future climate mitigation contracts based on the results of monitoring under paragraph (1) and reporting under paragraph (2). (g)

Authorization of appropriations

There are authorized to be appropriated to carry out this section such sums as are necessary.