EXCLUSIVE: Bill gives billions to save trees in other nations

EXCLUSIVE:

If a tree falls in Brazil, it will, in fact, be heard in the U.S. - at least if a little-noticed provision in the pending climate-change bill in Congress becomes law.

As part of the far-reaching climate bill, the House is set to vote Friday on a plan to pay companies billions of dollars not to chop down trees around the world, as a way to reduce global warming.

The provision, called "offsets," has been attacked by both environmentalists and business groups as ineffective and poorly designed. Critics contend it would send scarce federal dollars overseas to plant trees when subsidies are needed at home, while the purported ecological benefits would be difficult to quantify.

The offsets "would be a transfer of wealth overseas," said William Kovacs, vice president for environmental affairs at the U.S. Chamber of Commerce.

The Congressional Budget Office (CBO), the official fiscal scorekeeper on Capitol Hill, has not offered an estimate on how much the offset plan would cost, but the liberal Center for American Progress says it will be pricey.

"The international offsets market is not a huge or cheap market," said Joseph Romm, a climate expert at the center. "By 2020, the U.S. could be spending $4 billion on international offsets."

Supporters of the legislation counter that the plan recognizes the need to reduce greenhouse-gas emissions to curb global warming - in the United States and beyond. Supporting ways to keep trees alive or plant new trees, wherever those trees are located, helps the effort, they say.

Under the program, the government would reward domestic and international companies that perform approved "green" actions with certificates, called permits.

Those companies could, in turn, sell the permits to other companies that emit greenhouse gases. The permits would be, in effect, licenses to pollute - and potentially very valuable.

The heart of the climate plan would require major polluters to purchase the permits if they want to pollute above a certain level, controlling overall emissions through a market that is called "cap-and-trade."

Under the provision to be voted on in the House, the "green" companies could sell their offset permits to companies that need them because they are unable to reduce their own emissions as fast as the government would like.

But critics from both the political left and right see problems.

"You have to ask yourself, what is the purpose of this provision? Because it won't actually reduce emissions," said David Bookbinder, chief climate counsel to the Sierra Club, the environmental advocacy group.

Mr. Bookbinder said emissions could actually stay the same or increase domestically because companies could choose to buy permits instead of invest in technology to make their operations cleaner.

Kenneth P. Green, a climate specialist at the conservative American Enterprise Institute for Public Policy Research, said keeping track of which projects would be eligible for inclusion is another flaw in the plan.

"Who is responsible if there's a fire that burns down a [green] project? Will those just be wasted offsets?" he asked.

Mr. Green and others say the bill's offset provisions are too vague and leave unanswered too many questions about which projects will qualify for the offsets and how many offsets would be offered for a given project.

"The key with offsets is ensuring that they generate 'credible' emission reductions," said Evan Juska, North America senior policy manager for the Climate Group, which advises governments and business how to move to a low-carbon economy.

Mr. Juska said the bill, as written, "leaves much of it to be determined by the administrator after the program is enacted."

While tree stands are a large absorber of carbon dioxide and other greenhouse gases, they may not be the only projects that qualify for offsets. Companies that erect wind farms, install solar panels, invest in devices that trap the methane gas in landfills, use less fertilizer, or upgrade equipment at their refineries and power plants might also be eligible for offsets.

The bill would only allow 2 billion tons, or about 30 percent, of carbon-dioxide emissions to be offset a year through the so-called "green" actions.

Half of the qualifying projects must be domestic and half must be overseas, but the bill includes the option to award more offsets to international projects if not enough domestic projects are available.

The CBO projects that the thousands of firms subject to the cap-and-trade program would utilize 230 million tons of domestic offsets and 190 million tons of international offsets in 2012, the year the legislation is proposed to take effect, instead of reducing their emissions levels.