DOE 1605(b) Voluntary Greenhouse Gas Registry and Recent USDA Actions on Climate Change Thank you for your attention. William Hohenstein Global Change Program Office

Directives to USDA The Secretary of Energy, In consultation with the Secretary of Commerce, the Secretary of Agriculture, and the Administrator of the Environmental Protection Agency, to propose improvements to the current voluntary emissions reductions registration program under section 1605(b) of the 1992 Energy Policy Act…; The Secretary of Energy to recommend reforms to ensure that businesses and individuals that register reductions are not penalized under future climate policy and to give transferable credits to companies that can show real reductions; The Secretary of Agriculture, in consultation with the Environmental Protection Agency and the Department of Energy, to develop accounting rules and guidelines for crediting sequestration projects, taking into account emerging domestic and international approaches; The Secretary of Agriculture,to develop new targeted incentives for carbon sequestration and greenhouse gas reductions.

Timeline for Final Review and Release of 1605b Guidelines Fall ‘04 OMB review of proposed revised guidelines Public review of proposed revised guidelines --DOE public workshop --USDA public workshop on agriculture and forestry guidelines Release of revised 1605(b) guidelines 60 days Winter ’04-05

Importance for USDA Provides landowners with a tool to quantify and record greenhouse gas benefits of actions such as: Using no-till agriculture Installing a methane digester Improving nutrient management Managing forestland Provides opportunities for agriculture and forestry to: Partner with industry Document benefits of actions for future use Link reporting with conservation programs, e.g., CSP

Components of Proposed Revised 1605(b) Guidelines General Guidelines Initial draft submitted for public comment (12/03) Technical Guidelines Chapter 1: Inventory guidelines Methods for quantifying sources and sinks of greenhouse gases Appendices with detailed coefficients and protocols Chapter 2: Guidelines for emission reduction reporting Methods for quantifying and registering reductions in greenhouse gases Forms and Instructions Electronic and hard copies being prepared

Features of the Revised DOE 1605(b) Voluntary Greenhouse Gas Reporting System Overall quality of reported information will improve Consistent inventory methods. Inventory method rating system to determine eligibility for registration Requirements in order to “register reductions” Large entities (emissions over 10,000 tons CO2/yr) must report annual entity-wide inventories of GHG emissions and sinks to be eligible to register reductions Small entities (emissions less than 10,000 tons CO2/yr) can register reductions from specific activities Aggregators can report emissions and reductions of other entities Pre-2003 activities: Only allow activities beginning on 1/1/02 to be registered.

Reductions Can be Calculated as: Changes in emissions intensity Changes in absolute emissions (if not resulting from declines in output) Changes in carbon storage “Reductions” = Carbon stock year x - Carbon stock base year Changes in avoided emissions (resulting from energy sales) Action-specific emissions reductions (when other methods are not appropriate/feasible) Reductions associated with “emission-free” energy

USDA Contributions to the DOE 1605(b) Guidelines Inventory methods for agriculture sources Enteric fermentation Animal waste Rice cultivation Crop residue burning Nutrient and lime applications Inventory methods for agricultural soil carbon sequestration COMET model – produces default sequestration rates Protocols for periodic sampling Inventory methods for forest and wood products carbon stocks and fluxes Default tables by region, species, management intensity, productivity class Measurement and sampling protocols Guidance on the use of models COLE model – produces default forest carbon sequestration rates Methods for estimating reductions from carbon sequestration

Issues Related to Forestry and Agriculture How does the system ensure that reductions are maintained over time? How to ensure that land owners can’t receive reductions by shifting practices? Can simplified methods be developed for sustainably managed forests? Should landowners be responsible for natural disturbances? Can landowners receive reductions for forest preservation? How should carbon stored in wood products be reported?

Next Steps Finalize guidelines! Technical Assistance and Outreach Demonstrations User-friendly manuals Training sessions Guidance to technical support providers Utilize USDA cooperators (i.e., extension service, state conservationists, and field offices) Continue research to improve measurement, monitoring, and verification

Environmental Quality Incentives Program (EQIP) Greenhouse gases have been incorporated into USDA Conservation Programs Environmental Quality Incentives Program (EQIP) NRCS provided national guidance to make GHG a priority resource concern. New practice standards for digesters announced in 2003. Tiered payments under EQIP will reward producers who improve nutrient management Conservation Reserve Program (CRP) Secretary Veneman announced that USDA would target 500,000 acres (226,000 ha) of bottomland hardwoods under the CRP continuous sign-up FSA providing points for carbon sequestration in rating CRP proposals through the Environmental Benefits Index (EBI). Conservation Innovation Grants (CIG)

Greenhouse gases have been incorporated into USDA Conservation Programs Conservation Security Program – provides incentives for energy conservation and renewable energy production $500/farm for energy audit. Energy savings from conservation tillage -- depends on level of reductions in soil disturbance Index, fertilizer use, and over-all energy use. $2.50/100 kWh of energy produced by wind, solar, geothermal and methane. $125/500 gallons (one bio-component of liquid fuel). Renewable Energy Systems and Energy Efficiency Improvements Program Competitive grants for 167 recipients, including 35 manure digesters.