US House of Reps to vote on soil carbon trading system

17.07.07 Interview: US Farm Bill to create carbon credit standards

The House of Representatives will this week consider a proposal to establish a standard for carbon sequestration from land management and agriculture in the US, moving the country a step closer to creating carbon credits that could be used in a future greenhouse gas trading scheme. 

A subsection of the US Farm Bill, the main US law on agricultural land use that is revised and renewed by Congress every five years, proposes creating an Environmental Services Standards Board that would "facilitate the development of credit markets for conservation and land management activities that are agriculture or forest-based."
According to Carl Lucero of the natural resources conservation service in the US Department of Agriculture (USDA), establishing this type of board is necessary because it would create consistency in preparation for a national greenhouse gas emissions market.
"We are trying to build the infrastructure so these free markets can work," Lucero told Point Carbon, explaining that the environmental commodities being traded are "abstract."
"We need uniform standards so that when a market does evolve the players understand what all the rules are," he said.
Lucero has been leading the USDA's effort to draft a section on market-based approaches for environmental stewardship in the 2007 Farm Bill, which the House will begin to mark up – or open for amendments and comments – on Tuesday.
"Right now what we are seeing is that a lot of states are developing their own (carbon) caps, rules, and processes - but on a broader scale it doesn't make sense to have different caps or standards," Lucero told Point Carbon. "But with consistency we would create validity and confidence in the market."
Lucero said establishing the standards would benefit those who own the land where carbon can be sequestered. The USDA provides financial and technical assistance to private landowners, like ranchers and farmers, who own 75 per cent of land in the US.
While the goal of his agency's work is to achieve environmental benefits, the establishment of these standards would "open a great opportunity to connect the energy sector to what we do."
Under potential mandatory carbon caps, power companies could buy credits for carbon reductions achieved in the agricultural sector to comply with emissions constraints.
Under the bill, the secretary of agriculture would be responsible for ensuring the development of consistent standards for quantifying environmental benefits and for establishing reporting and credit registries, which could include third-party verifiers.
The secretary would also serve as the chairman of the standards board, whose members would include the energy, interior, commerce and transportation secretaries, as well as the administrator of the Environmental Protection Agency.
According to Lucero, the agency is asking for $50 million (€36.3 million) to establish the board, which would distribute grants competitively to universities and researchers to assist the agriculture department make the most accurate set of standards.
"We need all the players who have control over those natural resources to be at the table with us," he said.
The board would quantify other environmental commodities for which markets exist, including water quality credits, the other greenhouse gases and wetlands banking.
Next Steps
Although the House and Senate will debate their own versions of the 2007 Farm Bill, Lucero said that both drafts contain sections on creating market-based approaches for environmental goods and services and an Environmental Services Standards Board.
The agriculture department held 52 Farm Bill forums across the country to get feedback on all titles of the legislation, and found widespread support for the creation of a standards board.
"Once you've got standards, it brings transparency to the market," Lucero said. "If you use the same process to measure carbon in California as you do in Illinois and in Florida, then the transparency is simple and you begin to have a more fluid market."
Washington DC

PS Thanks to Tony Lovell for passing this on...