I 
111TH CONGRESS 
1ST SESSION H. R. 1790 
To reduce global greenhouse gas emissions resulting from land conversion 
and deforestation in developing countries, to provide incentives for devel-
oping countries to increase forest carbon stocks, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 30, 2009 
Mr. ENGEL introduced the following bill; which was referred to the Committee 
on Foreign Affairs, and in addition to the Committee on Energy and 
Commerce, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To reduce global greenhouse gas emissions resulting from 
land conversion and deforestation in developing countries, 
to provide incentives for developing countries to increase 
forest carbon stocks, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Forest Carbon Emis-
sion Reduction Act’’. 
SEC. 2. FINDINGS. 
Congress finds that— 
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(1) changes in land use patterns and forest sec-
tor emissions account for approximately 20 percent 
of global greenhouse gas emissions; 
(2) land conversion and deforestation are two of 
the largest sources of greenhouse gas emissions in 
the developing world, comprising approximately 40 
percent of the total greenhouse gas emissions of the 
developing world; 
(3) with sufficient data, the rates of deforest-
ation and forest degradation and the level of forest 
carbon stocks can be measured, subject to an accept-
able degree of uncertainty; 
(4) encouraging reduced deforestation and re-
duced forest degradation in foreign countries 
could— 
(A) provide critical leverage to encourage 
voluntary participation by developing countries 
in emission limitation regimes; 
(B) facilitate greater overall reductions in 
greenhouse gas emissions than otherwise would 
be practicable; and 
(C) substantially benefit biodiversity, con-
servation, and indigenous and other forest-de-
pendent people in developing countries; 
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(5) in addition to forest carbon activities that 
can be readily measured, monitored, and verified 
through national-scale programs and projects, there 
is great value in reducing emissions and sequestering 
carbon through forest carbon projects in countries 
that lack the institutional arrangements to support 
national-scale accounting of forest carbon stocks; 
and 
(6) providing emission allowances in support of 
activities in countries that lack fully developed insti-
tutions for national-scale accounting could help to 
build capacity in those countries, increase the se-
questration of additional carbon, and increase par-
ticipation by developing countries in international 
climate agreements. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) DEVELOPING COUNTRIES.—The term ‘‘de-
veloping countries’’ means countries considered to be 
‘emerging and developing economies’ according to 
the International Monetary Fund’s World Economic 
Outlook Report, April 2008, except the term does 
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not include countries determined by the Secretary to 
have repeatedly provided support for acts of inter-
national terrorism, as designated pursuant to section 
6(j) of the Export Administration Act of 1979, sec-
tion 40 of the Arms Export Control Act, and section 
620A of the Foreign Assistance Act of 1961. 
(3) INTERNATIONAL FOREST CARBON ACTIVI-
TIES.—The term ‘‘international forest carbon activi-
ties’’ means national or subnational activities in de-
veloping countries that are directed at— 
(A) reducing greenhouse gas emissions 
from deforestation and forest degradation; 
(B) reducing greenhouse gas emissions 
from conversion of peatlands; and 
(C) increasing sequestration of carbon 
through— 
(i) restoration of forests; 
(ii) restoration of degraded land that 
has not been forested prior to restoration; 
(iii) afforestation, using native species 
where practicable; and 
(iv) improved forest management. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of State. 
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SEC. 4. VOLUNTARY PARTICIPATION IN PROGRAMS. 
(a) CONSULTATION REQUIREMENT.—No activity au-
thorized by section 5 or 6 shall be carried out in a devel-
oping country until at least 30 days after the date on 
which the Administrator, in consultation with the Sec-
retary, completes consultation about the activity with the 
government of that developing country. 
(b) COMPLIANCE WITH LOCAL LAWS.—No activity 
authorized by section 5 or 6 shall be carried out in a devel-
oping country if the activity is inconsistent with the laws 
of that developing country. 
SEC. 5. SET-ASIDE OF EMISSION ALLOWANCES TO FOREST 
CARBON ACTIVITIES IN DEVELOPING COUN-
TRIES. 
(a) PURPOSE.—The purposes of this section are— 
(1) to facilitate voluntary participation in na-
tional-level activities and accounting in the forest 
sector in developing countries to ensure market 
readiness for emissions reductions and increased se-
questration from international forest carbon activi-
ties in developing countries; and 
(2) to facilitate voluntary participation in inter-
national forest carbon activities at sub-national lev-
els in developing countries that achieve low-cost 
emissions reductions or increased sequestration. 
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(b) REQUIREMENT TO SET-ASIDE EMISSION ALLOW-
ANCES.—To the extent emission allowances are estab-
lished under any provision of law to address greenhouse 
gas emissions, the Administrator shall allocate each cal-
endar year, pursuant to subsection (c), a portion of the 
emission allowances to assist developing countries in their 
efforts to achieve emissions reductions or increase seques-
tration of carbon dioxide from international forest carbon 
activities. 
(c) ALLOCATION.— 
(1) ONE-PERCENT
ALLOCATION.—Not later 
than 330 days before January 1 of each of calendar 
years 2013 through 2050, the Administrator shall 
allocate for distribution under this section one per-
cent of the aggregate quantity of emission allow-
ances established for that calendar year. 
(2) EARLY
ACTION.—For each of calendar 
years 2011 and 2012, the Administrator shall allo-
cate for early action distribution not more than 10 
percent of the aggregate quantity of emission allow-
ances available for each of calendar years 2013 
through 2022. 
(3) CARRYOVER.—If the aggregate quantity of 
emission allowances for a calendar year is not allo-
cated for distribution in the calendar year, the Ad-
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ministrator shall carry over to the next calendar 
year the remaining emission allowances. 
(d) ENSURING MARKET READINESS IN DEVELOPING 
COUNTRIES.— 
(1) SET-ASIDE AND AUCTION.—The Adminis-
trator shall— 
(A) set-aside a portion of the allowances to 
be allocated under subsection (c) for the pur-
pose of ensuring market readiness in developing 
countries; and 
(B) auction those allowances, with the pro-
ceeds deposited into a market readiness account 
for distribution as provided in paragraph (2). 
(2) ELIGIBILITY FOR PROCEEDS.—The Admin-
istrator shall establish criteria under which devel-
oping countries will be eligible to receive amounts 
from the market readiness account for the purpose 
of preparing a national forest carbon strategy, in-
cluding— 
(A) developing a reliable estimate of the 
national forest carbon stocks and sources of 
forest emissions of the developing country; 
(B) defining the national emission ref-
erence baseline for the developing country based 
on past emission rates; 
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(C) specifying options for reducing emis-
sions; and 
(D) implementing mechanisms that will 
support policies, programs, and projects to re-
duce emissions. 
(e) INCENTIVE PAYMENTS FOR LOW-COST EMISSION 
REDUCTIONS AND SEQUESTRATION ACTIVITIES.— 
(1) IN GENERAL.—The Administrator shall es-
tablish criteria under which developing countries will 
be eligible to receive emission allowances allocated 
under subsection (c), other than the allowances set- 
aside under subsection (d), to implement national 
strategies— 
(A) to reduce emissions from deforestation 
and forest degradation; 
(B) to implement low-cost emission reduc-
tion or sequestration projects in the forest sec-
tor; and 
(C) to implement activities with respect to 
largely intact native forests to guard against 
deforestation. 
(2) PRIORITY.—Emission allowances under this 
subsection shall be awarded in a manner that fa-
vors— 
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(A) achievement of the greatest quantity of 
carbon sequestration or emission reductions for 
the lowest cost; 
(B) broad geographical distribution of 
projects; and 
(C) reduction of international leakage, par-
ticularly in developing countries with largely in-
tact native forests. 
(3) PROHIBITION
BASED
ON
CERTAIN
CRI-
TERIA.—No emission allowances under this section 
shall be awarded to countries, or entities for projects 
in countries, that meet the criteria established to 
carry out subsection (d), as determined by the Ad-
ministrator, after the two-year period beginning on 
the date the Administrator determines that those 
criteria first apply. 
(4) PROHIBITIONS BASED ON EMISSIONS.— 
(A) INITIAL
THRESHOLD.—For any cal-
ender year after calendar year 2015 and before 
calendar year 2021, no allowances shall be 
awarded with respect to a project or activity in 
a country that generates greenhouse gas emis-
sions accounting for more than one percent of 
global greenhouse gas emissions during the pre-
ceding calendar year. 
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(B) SUBSEQUENT THRESHOLD.—For cal-
endar year 2021 and any calender year there-
after, no allowances shall be awarded with re-
spect to a project or activity in a country that 
generates greenhouse gas emissions accounting 
for more than 0.5 percent of global greenhouse 
gas emissions during the preceding calendar 
year. 
(C) EXCEPTION.—Upon a determination 
by the Administrator that provision of allow-
ances to a project or activity in a country that 
would otherwise be subject to the exclusions in 
subparagraph (A) or (B) is in the interest of 
building needed capacity or reducing inter-
national carbon leakage, allowances may be 
issued to the project or activity subject to other 
criteria in this subsection. 
(f) QUALITY
AND ELIGIBILITY REQUIREMENTS.— 
Not later than 18 months after the date of enactment of 
this Act, the Administrator, in consultation with the Sec-
retary, shall promulgate regulations establishing eligibility 
requirements for the allocation of emission allowances 
under this section for international forest carbon activi-
ties, recognizing that the purpose of this section is to as-
sist forested developing countries in achieving emission re-
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ductions or increased sequestration of carbon dioxide from 
international forest carbon activities, to ensure market 
readiness, and to build capacity to participate in inter-
national forest carbon activities. 
(g) OTHER NATURAL LAND THAT SEQUESTERS CAR-
BON.—The Administrator may provide emission allow-
ances under this section for a project for storage of carbon 
in other natural land if the Administrator determines 
that— 
(1) the natural land is capable of storing car-
bon; and 
(2) the project for storage of carbon in the nat-
ural land is capable of meeting the eligibility and 
quality criteria established pursuant to subsection 
(f). 
(h) LIMITATION ON DOUBLE COUNTING.—Notwith-
standing any other provision of this Act, activities that 
receive credit under section 5 shall not be eligible to re-
ceive emission allowances under this section. 
(i) EFFECT
ON
INTERACTION
BETWEEN
ENTI-
TIES.—Nothing in this section supersedes, limits, or other-
wise affects any restriction imposed by Federal law (in-
cluding regulations) on any interaction between an entity 
located in the United States and an entity located in a 
foreign country. 
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SEC. 6. OFFSETS FOR INTERNATIONAL FOREST CARBON 
ACTIVITIES. 
(a) REGULATIONS.—Not later than two years after 
the date of enactment of this Act, the Administrator, in 
consultation with the Secretary, shall promulgate regula-
tions (including regulations relating to quality and eligi-
bility requirements) for the use of offset allowances for 
international forest carbon activities. 
(b) QUALITY AND ELIGIBILITY REQUIREMENTS.— 
The regulations promulgated pursuant to subsection (a) 
shall require that, in order to be approved for use under 
this section, offset allowances for an international forest 
carbon activity shall meet such quality and eligibility re-
quirements as the Administrator may establish, including 
requirements that— 
(1) the activity shall be designed, carried out, 
and managed— 
(A) in accordance with widely-accepted, en-
vironmentally sustainable forestry practices; 
(B) to promote native species and con-
servation or restoration of native forests, if 
practicable, and to avoid the introduction of 
invasive nonnative species; 
(C) in a manner that is supportive of the 
internationally-recognized rights of indigenous 
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and other forest-dependent people living in the 
affected areas; and 
(D) in a manner that enhances the capa-
bility, if consistent with the applicable laws in 
the country involved, of local communities to 
exercise prior informed consent regarding 
projects or other activities, and to prevent the 
improper taking of property; and 
(2) the emission reductions or sequestrations 
are real, permanent, additional, verifiable, and en-
forceable, with reliable measuring and monitoring 
and appropriate accounting for leakage. 
(c) NATIONAL LEVEL ACTIVITIES.— 
(1) IN
GENERAL.—Not later than two years 
after the date of enactment of this Act, the Adminis-
trator, in consultation with the Secretary, shall pre-
pare a list of countries that have— 
(A) demonstrated the capacity to partici-
pate in international forest carbon activities at 
a national level, including— 
(i) 
sufficient 
historical 
data 
on 
changes in national forest carbon stocks; 
(ii) the technical capacity to monitor 
and measure forest carbon fluxes with an 
acceptable level of uncertainty; and 
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