SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Climate Stewardship 
and Economic Security Act of 2007’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
Sec. 3. Definitions. 
TITLE I—MARKET TO REDUCE GREENHOUSE GAS EMISSIONS 
Subtitle A—Tracking Emissions 
Sec. 101. National Greenhouse Gas Database and registry established. 
Sec. 102. Inventory of greenhouse gas emissions for covered entities. 
Sec. 103. Greenhouse gas reduction registration. 
Sec. 104. Measurement and verification. 
Subtitle B—Mandating Emission Reductions 
Sec. 121. Covered entities must submit allowances for emissions. 
Sec. 122. Compliance. 
Sec. 123. Exemption of source categories. 
Sec. 124. Establishment of tradeable allowances. 
Sec. 125. International reserve allowance program. 
Sec. 126. Penalties. 
Subtitle C—Controlling Compliance Costs 
PART 1—USE OF ALLOWANCES 
Sec. 141. Trading. 
Sec. 142. Banking. 
Sec. 143. Borrowing against future reductions. 
Sec. 144. Domestic offsets. 
Sec. 145. International credits plan. 
Sec. 146. Outreach initiative on revenue enhancement for agricultural pro-
ducers. 
PART 2—CARBON MARKET EFFICIENCY BOARD 
Sec. 151. Establishment of Board. 
Sec. 152. Duties. 
Sec. 153. Powers. 
Sec. 154. Estimate of costs to economy of limiting greenhouse gas emissions. 
Subtitle D—Allocation of Tradeable Allowances 
Sec. 161. Determination of tradeable allowance allocations. 
Sec. 162. Provision of tradeable allowances. 
Sec. 163. Ensuring target adequacy. 
Sec. 164. Initial allocations for early participation and accelerated participation. 
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Sec. 165. Bonus for accelerated participation. 
TITLE II—CLIMATE CHANGE CREDIT CORPORATION 
Sec. 201. Establishment. 
Sec. 202. Purposes and functions. 
TITLE III—MISCELLANEOUS 
Sec. 301. NOAA report on climate change effects; preparation assistance. 
Sec. 302. Adaptation technologies. 
Sec. 303. Mitigating climate change’s impacts on the poor. 
Sec. 304. Wildlife conservation. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) BASELINE.—The term ‘‘baseline’’ means 
the historic greenhouse gas emission levels of an en-
tity, as adjusted upward by the Administrator to re-
flect actual reductions that are verified in accord-
ance with— 
(A) regulations promulgated under section 
101(c)(1); and 
(B) relevant standards and methods devel-
oped under this Act. 
(3) BOARD.—The term ‘‘Board’’ means the 
Carbon Market Efficiency Board established under 
section 151. 
(4) CARBON DIOXIDE EQUIVALENTS.—The term 
‘‘carbon dioxide equivalents’’ means, for each green-
house gas, the amount of each such greenhouse gas 
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that makes the same contribution to global warming 
as one metric ton of carbon dioxide, as determined 
by the Administrator. 
(5) COVERED
SECTORS.—The term ‘‘covered 
sectors’’ means the electric power, transportation, 
industrial, and commercial sectors, as such terms 
are used in the Inventory. 
(6) COVERED ENTITY.—The term ‘‘covered en-
tity’’ means an entity (including a branch, depart-
ment, agency, or instrumentality of Federal, State, 
or local government) that— 
(A) owns or controls a source of green-
house gas emissions in the electric power, in-
dustrial, or commercial sector of the United 
States economy (as defined in the Inventory), 
refines or imports refined petroleum products 
for use in transportation, or produces or im-
ports hydrofluorocarbons, perfluorocarbons, or 
sulfur hexafluoride; and 
(B) emits, from any single facility owned 
by the entity, over 10,000 metric tons of green-
house gas per year, measured in units of carbon 
dioxide equivalents, or— 
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(i) refines or imports refined petro-
leum products that, when combusted, will 
emit; 
(ii) 
produces 
or 
imports 
hydrofluorocarbons, perfluorocarbons, or 
sulfur hexafluoride that, when used, will 
emit; or 
(iii) produces or imports other green-
house gases that, when used, will emit, 
over 10,000 metric tons of greenhouse gas per 
year, measured in units of carbon dioxide 
equivalents. 
(7) DATABASE.—The term ‘‘database’’ means 
the National Greenhouse Gas Database established 
under section 101. 
(8) DIRECT
EMISSIONS.—The term ‘‘direct 
emissions’’ means greenhouse gas emissions by an 
entity from a facility that is owned or controlled by 
that entity. 
(9) FACILITY.—The term ‘‘facility’’ means a 
building, structure, or installation located on any 1 
or more contiguous or adjacent properties of an enti-
ty in the United States. 
(10) GREENHOUSE
GAS.—The term ‘‘green-
house gas’’ means— 
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(A) carbon dioxide; 
(B) methane; 
(C) nitrous oxide; 
(D) hydrofluorocarbons; 
(E) perfluorocarbons; or 
(F) sulfur hexafluoride. 
(11) INDIRECT EMISSIONS.—The term ‘‘indirect 
emissions’’ means greenhouse gas emissions that 
are— 
(A) a result of the activities of an entity; 
but 
(B) emitted from a facility owned or con-
trolled by another entity. 
(12) 
INVENTORY.—The 
term 
‘‘Inventory’’ 
means the Inventory of U.S. Greenhouse Gas Emis-
sions and Sinks, prepared in compliance with the 
United Nations Framework Convention on Climate 
Change Decision 3/CP.5. 
(13) LEAKAGE.—The term ‘‘leakage’’ means— 
(A) a potentially unaccounted increase in 
greenhouse gas emissions by a facility or entity 
caused by an offset project that produces an ac-
counted reduction in greenhouse gas emissions; 
or 
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(B) a potentially unaccounted decrease in 
sequestration that is caused by an offset project 
that results in an accounted increase in seques-
tration. 
(14) PERMANENCE.—The term ‘‘permanence’’ 
means the extent to which greenhouse gases that are 
sequestered will not later be returned to the atmos-
phere. 
(15) REGISTRY.—The term ‘‘registry’’ means 
the registry of greenhouse gas emission reductions 
and increases in sequestration established under sec-
tion 101(b)(2). 
(16) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Commerce. 
(17) SEQUESTRATION.— 
(A) IN GENERAL.—The term ‘‘sequestra-
tion’’ means the long-term capture, separation, 
isolation, or removal of greenhouse gases from 
the atmosphere. 
(B) INCLUSIONS.—The term ‘‘sequestra-
tion’’ includes, as the Administrator determines 
appropriate for carrying out this Act— 
(i) agricultural and conservation prac-
tices; 
(ii) reforestation; 
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TITLE I—MARKET TO REDUCE 
GREENHOUSE GAS EMISSIONS 
Subtitle A—Tracking Emissions 
SEC. 101. NATIONAL GREENHOUSE GAS DATABASE AND 
REGISTRY ESTABLISHED. 
(a) ESTABLISHMENT.—As soon as practicable after 
the date of enactment of this Act, the Administrator, in 
coordination with the Secretary, the Secretary of Energy, 
the Secretary of Agriculture, State governments, and pri-
vate sector and nongovernmental organizations, shall es-
tablish, operate, and maintain a database, to be known 
as the ‘‘National Greenhouse Gas Database’’, to collect, 
verify, and analyze data on greenhouse gas emissions by 
entities. 
(b) NATIONAL GREENHOUSE GAS DATABASE COM-
PONENTS.—The database shall consist of— 
(1) an inventory of greenhouse gas emissions; 
and 
(2) a registry of greenhouse gas emission reduc-
tions and increases in sequestrations. 
(c) COMPREHENSIVE SYSTEM.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of enactment of this Act, the Administrator 
shall promulgate regulations to implement a com-
prehensive system for greenhouse gas emissions re-
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porting, inventorying, and reduction and sequestra-
tion registration. 
(2) REQUIREMENTS.—The Administrator shall 
ensure, to the maximum extent practicable, that— 
(A) the comprehensive system described in 
paragraph (1) is designed to— 
(i) maximize completeness, trans-
parency, and accuracy of data reported; 
and 
(ii) minimize costs incurred by entities 
in measuring and reporting greenhouse gas 
emissions, emission reductions, and seques-
trations; and 
(B) the regulations promulgated under 
paragraph (1) establish procedures and proto-
cols necessary— 
(i) to prevent the double-counting of 
greenhouse gas emissions, emission reduc-
tions, or sequestrations reported by more 
than 1 reporting entity; 
(ii) to provide for corrections to errors 
in data submitted to the database; 
(iii) to provide for adjustment to data 
by reporting entities that have had a sig-
nificant organizational change (including 
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mergers, acquisitions, and divestiture), in 
order to maintain comparability among 
data in the database over time; 
(iv) to provide for adjustments to re-
flect new technologies or methods for 
measuring or calculating greenhouse gas 
emissions, emission reductions, or seques-
trations; 
(v) to account for changes in registra-
tion of ownership of emission reductions or 
increases in sequestration resulting from a 
voluntary private transaction between re-
porting entities; 
(vi) to prevent a covered entity from 
avoiding the requirements of this Act by 
reorganization into multiple entities that 
are under common control; and 
(vii) to clarify the responsibility for 
reporting in the case of any facility owned 
or controlled by more than 1 entity. 
(3) SERIAL
NUMBERS.—Through regulations 
promulgated under paragraph (1), the Administrator 
shall develop and implement a system that pro-
vides— 
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(A) for the provision of unique serial num-
bers to identify the registered emission reduc-
tions or increases in sequestration made by an 
entity; 
(B) for the tracking of the registered re-
ductions or sequestrations associated with the 
serial numbers; and 
(C) for such action as may be necessary to 
prevent counterfeiting of the registered reduc-
tions or sequestrations. 
SEC. 102. INVENTORY OF GREENHOUSE GAS EMISSIONS 
FOR COVERED ENTITIES. 
(a) IN GENERAL.—Not later than July 1st of each 
calendar year after 2011, each covered entity shall submit 
to the Administrator a report that states, for the pre-
ceding calendar year, the entity-wide greenhouse gas emis-
sions in the United States (as reported at the facility 
level), including— 
(1) the total quantity of direct emissions from 
stationary sources, including process and fugitive 
emissions, expressed in units of carbon dioxide 
equivalents, except those reported under paragraph 
(3); 
(2) the amount of petroleum products refined 
or refined petroleum products imported by the entity 
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for use in transportation and the amount of green-
house gases, expressed in units of carbon dioxide 
equivalents, that would be emitted when these prod-
ucts are used for transportation, as determined by 
the Administrator under section 121(b); 
(3) 
the 
amount 
of 
hydrofluorocarbons, 
perfluorocarbons, or sulfur hexafluoride, expressed 
in units of carbon dioxide equivalents, that are pro-
duced or imported by the entity and will ultimately 
be emitted in the United States, as determined by 
the Administrator under section 121(d); and 
(4) such other categories of greenhouse gas 
emissions in the United States as the Administrator 
determines in the regulations promulgated under 
section 101(c)(1) may be practicable and useful for 
the purposes of this Act, such as indirect emissions. 
(b) COLLECTION AND ANALYSIS OF DATA.—The Ad-
ministrator shall collect and analyze data reported under 
subsection (a) for use under this title. 
SEC. 103. GREENHOUSE GAS REDUCTION REGISTRATION. 
(a) IN GENERAL.—Subject to the requirements de-
scribed in subsection (b)— 
(1) a covered entity may register greenhouse 
gas emission reductions and increases in sequestra-
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tion achieved after 1990 and before 2012 under this 
section; and 
(2) an entity that is not a covered entity may 
register greenhouse gas emission reductions and in-
creases in sequestration achieved at any time since 
1990 under this section. 
(b) REQUIREMENTS.— 
(1) IN GENERAL.—The requirements referred 
to in subsection (a) are that an entity (other than 
an entity described in paragraph (2)) shall— 
(A) establish a baseline; and 
(B) submit the report described in section 
102(a)(1). 
(2) REQUIREMENTS NOT APPLICABLE TO ENTI-
TIES ENTERING INTO CERTAIN AGREEMENTS.—An 
entity that enters into an agreement with a partici-
pant in the registry for the purpose of a carbon se-
questration project may register greenhouse gas 
emission reductions or sequestrations without being 
required to comply with the requirements specified 
in paragraph (1), unless that entity is required to 
comply with those requirements by reason of an ac-
tivity other than the agreement. 
(c) PROCEDURE.— 
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(B) in the case of each voluntary report 
under paragraph (1), represents— 
(i) actual reductions in greenhouse 
gas emissions relative to historic emission 
levels of the entity; or 
(ii) actual increases in net sequestra-
tion. 
(3) FAILURE TO SUBMIT REPORT.—An entity 
that submits data for registration of emission reduc-
tions or increases in sequestration in the registry 
and that fails to submit a report required under this 
subsection shall be prohibited from using, or allow-
ing another entity to use, its registered emissions re-
ductions or increases in sequestration to satisfy the 
requirements of section 121. 
(4) 
INDEPENDENT
THIRD-PARTY 
VERIFICATION.—To meet the requirements of this 
section and section 104, an entity that submits a re-
port under this section may— 
(A) 
obtain 
independent 
third-party 
verification; and 
(B) present the results of the third-party 
verification to the Administrator. 
(5) AVAILABILITY OF DATA.— 
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(A) IN
GENERAL.—The Administrator 
shall ensure that information in the database 
is— 
(i) published; and 
(ii) accessible to the public, including 
in electronic format on the Internet. 
(B) EXCEPTION.—Subparagraph (A) shall 
not apply in any case in which the Adminis-
trator determines that publishing or otherwise 
making available information described in that 
subparagraph— 
(i) poses a risk to national security; or 
(ii) discloses confidential business in-
formation that can not be derived from in-
formation that is otherwise publicly avail-
able and that would cause competitive 
harm if published. 
(6) DATA
INFRASTRUCTURE.—The Adminis-
trator shall ensure, to the maximum extent prac-
ticable, that the database uses, and is integrated 
with, Federal, State, and regional greenhouse gas 
data collection and reporting systems. 
(7) ADDITIONAL ISSUES TO BE CONSIDERED.— 
In promulgating the regulations under section 
101(c)(1) and implementing the database, the Ad-
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ministrator shall take into consideration a broad 
range of issues involved in establishing an effective 
database, including— 
(A) the data and information systems and 
measures necessary to identify, track, and 
verify greenhouse gas emissions in a manner 
that will encourage private sector trading and 
exchanges; 
(B) the greenhouse gas reduction and se-
questration measurement and estimation meth-
ods and standards applied in other countries, as 
applicable or relevant; 
(C) the extent to which available data on 
fossil fuels, greenhouse gas emissions, and 
greenhouse gas production, refining, and impor-
tation are adequate to implement the database; 
and 
(D) the differences in, and potential 
uniqueness of, the facilities, operations, and 
business and other relevant practices of persons 
and entities in the private and public sectors 
that may be expected to participate in the data-
base. 
(d) ANNUAL REPORT.—The Administrator shall pub-
lish an annual report that— 
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(1) describes the total greenhouse gas emis-
sions, emission reductions, and increases in seques-
tration reported to the database during the year cov-
ered by the report; 
(2) provides entity-by-entity and sector-by-sec-
tor analyses of the emissions, emission reductions, 
and increases in sequestration reported; 
(3) describes the atmospheric concentrations of 
greenhouse gases; 
(4) provides a comparison of current and past 
atmospheric concentrations of greenhouse gases; and 
(5) describes the activity during the year cov-
ered by the report in the trading of greenhouse gas 
emission allowances. 
SEC. 104. MEASUREMENT AND VERIFICATION. 
(a) METHODS AND STANDARDS.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Administrator 
shall establish by rule, in coordination with the Sec-
retary, the Secretary of Energy, and the Secretary 
of Agriculture, comprehensive measurement and 
verification methods and standards to ensure a con-
sistent and technically accurate record of greenhouse 
gas emissions, emission reductions, sequestration, 
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and atmospheric concentrations for use in the reg-
istry. 
(2) REQUIREMENTS.—The methods and stand-
ards established under paragraph (1) shall include— 
(A) a requirement that an entity submit-
ting data for the database use a continuous 
emissions monitoring system, or another system 
of measuring emissions, emission reductions, or 
increases in sequestration that is determined by 
the Administrator to provide information with 
precision, reliability, accessibility, and timeli-
ness similar to that provided by a continuous 
emissions monitoring system where techno-
logically feasible; 
(B) establishment of standardized meas-
urement and verification practices for reports 
made by all entities participating in the reg-
istry, taking into account— 
(i) protocols and standards in use by 
entities requiring or desiring to participate 
in the registry as of the date of develop-
ment of the methods and standards under 
paragraph (1); 
(ii) boundary issues, such as leakage; 
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(iii) avoidance of double counting of 
greenhouse gas emissions, emission reduc-
tions, and increases in sequestration; and 
(iv) such other factors as the Admin-
istrator, in consultation with the Secretary, 
the Secretary of Energy, and the Secretary 
of Agriculture, determines to be appro-
priate; 
(C) establishment of methods of— 
(i) estimating greenhouse gas emis-
sions, for those cases in which the Admin-
istrator determines that methods of moni-
toring or measuring such emissions with 
precision, 
reliability, 
accessibility, 
and 
timeliness similar to that provided by a 
continuous emissions monitoring system 
are not technologically feasible at present; 
and 
(ii) reporting the accuracy of such es-
timations; 
(D) establishment of measurement and 
verification standards applicable to actions 
taken to reduce or sequester greenhouse gas 
emissions; 
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(E) in coordination with the Secretary of 
Agriculture, standards to measure the results of 
the use of carbon sequestration, including— 
(i) soil carbon sequestration practices; 
(ii) forest preservation and reforest-
ation activities that adequately address the 
issues 
of 
permanence, 
leakage, 
and 
verification; and 
(iii) production of cellulosic biomass 
crops; 
(F) establishment of standards for obtain-
ing the Administrator’s approval of the suit-
ability of geological storage sites that include 
evaluation of both the geology of the site and 
the entity’s capacity to manage the site; 
(G) establishment of other features that, 
as determined by the Administrator, will allow 
entities to adequately establish a fair and reli-
able measurement and reporting system; and 
(H) establishment of such other measure-
ment and verification standards as the Adminis-
trator, in consultation with the Secretary of Ag-
riculture, the Secretary, and the Secretary of 
Energy, determines to be appropriate. 
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(b) PUBLIC
PARTICIPATION.—The Administrator 
shall make available to the public for comment, in draft 
form and for a period of at least 90 days, the methods 
and standards developed under subsection (a) before 
issuing final regulations under this section. 
(c) EXPERTS AND CONSULTANTS.— 
(1) IN GENERAL.—The Administrator may ob-
tain the services of experts and consultants in the 
private and nonprofit sectors for the purpose of car-
rying out this section in accordance with section 
3109 of title 5, United States Code, in the areas of 
greenhouse gas measurement, certification, and 
emission trading. 
(2) AVAILABLE ARRANGEMENTS.—In obtaining 
any service described in paragraph (1), the Adminis-
trator may use any available grant, contract, cooper-
ative agreement, or other arrangement authorized by 
law. 
(d) REVIEW
AND REVISION.—The Administrator 
shall periodically review, and revise as necessary, the 
methods and standards developed under subsection (a). 
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Subtitle B—Mandating Emission 
Reductions 
SEC. 121. COVERED ENTITIES MUST SUBMIT ALLOWANCES 
FOR EMISSIONS. 
(a) IN GENERAL.—Beginning with calendar year 
2012— 
(1) each covered entity in the electric power, in-
dustrial, and commercial sectors shall submit to the 
Administrator one tradeable allowance for every 
metric ton of greenhouse gases, measured in units of 
carbon dioxide equivalents, that it emits from sta-
tionary sources, except those described in paragraph 
(2); 
(2) 
each 
producer 
or 
importer 
of 
hydrofluorocarbons, 
perfluorocarbons, 
or 
sulfur 
hexafluoride that is a covered entity shall submit to 
the Administrator one tradeable allowance for every 
metric ton of hydrofluorocarbons, perfluorocarbons, 
or sulfur hexafluoride, measured in units of carbon 
dioxide equivalents, that it produces or imports and 
that are deemed under subsection (d) to be emitted 
in the United States; and 
(3) each petroleum product refiner or importer 
that is a covered entity shall submit one tradeable 
allowance for every unit of petroleum product it sells 
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that will produce one metric ton of greenhouse gases 
when used for transportation, measured in units of 
carbon dioxide equivalents, as determined by the Ad-
ministrator under subsection (b). 
(b) DETERMINATION OF TRANSPORTATION SECTOR 
AMOUNT.—For the transportation sector, the Adminis-
trator shall determine the amount of greenhouse gases, 
measured in units of carbon dioxide equivalents, that will 
be deemed to be emitted when petroleum products are 
used for transportation. 
(c) EXCEPTION
FOR CERTAIN DEPOSITED EMIS-
SIONS.—Notwithstanding subsection (a), a covered entity 
is not required to submit a tradeable allowance for any 
amount of greenhouse gas that would otherwise have been 
emitted from a facility under the ownership or control of 
that entity if— 
(1) the emission is deposited in a geological 
storage facility approved by the Administrator de-
scribed in section 104(a)(2)(F); and 
(2) the entity agrees to submit tradeable allow-
ances for any portion of the deposited emission that 
is subsequently emitted from that facility. 
(d) DETERMINATION
OF
HYDROFLUOROCARBON, 
PERFLUOROCARBON, 
AND
SULFUR
HEXAFLUORIDE 
AMOUNT.—The 
Administrator 
shall 
determine 
the 
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amounts of hydrofluorocarbons, perfluorocarbons, or sul-
fur hexafluoride, measured in units of carbon dioxide 
equivalents, that will be deemed to be emitted for purposes 
of this Act. 
(e) ALLOWANCES
RETIRED.—Upon receiving a 
tradeable allowance pursuant to a requirement under this 
subtitle, the Administrator shall retire the serial number 
assigned to that allowance. 
SEC. 122. COMPLIANCE. 
(a) SOURCE OF TRADEABLE ALLOWANCES USED.— 
A covered entity may use a tradeable allowance to meet 
the requirements of this subtitle without regard to whether 
the tradeable allowance was allocated to it under subtitle 
D or acquired from another entity or the Climate Change 
Credit Corporation established under section 201. 
(b) VERIFICATION BY ADMINISTRATOR.—At various 
times during each year, the Administrator shall determine 
whether each covered entity has met the requirements of 
this subtitle. In making that determination, the Adminis-
trator shall take into account the tradeable allowances 
submitted by the covered entity to the Administrator. 
SEC. 123. EXEMPTION OF SOURCE CATEGORIES. 
(a) IN GENERAL.—The Administrator may grant an 
exemption from the requirements of this subtitle to a 
source category if the Administrator determines, after 
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