329
‘‘(2) In any action under the antitrust laws, an 
activity described in paragraph (1) shall be judged 
on the basis of its reasonableness, taking into ac-
count all relevant factors affecting competition and 
reliability. 
‘‘(3) For purposes of this subsection, the term 
‘antitrust laws’ has the meaning given the term in 
subsection (a) of the first section of the Clayton Act 
(15 U.S.C. 12(a)), except that it includes section 5 
of the Federal Trade Commission Act (15 U.S.C. 
45) to the extent that section 5 applies to unfair 
methods of competition. 
‘‘(k) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition 
of at least 2⁄3 of the States within a region that have more 
than 1⁄2 of their electric load served within the region. A 
regional advisory body shall be composed of one member 
from each participating State in the region, appointed by 
the Governor of each State, and may include representa-
tives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the 
electric reliability organization, a regional reliability enti-
ty, or the Commission regarding the governance of an ex-
isting or proposed regional reliability entity within the 
same region, whether a standard proposed to apply within
330
the region is just, reasonable, not unduly discriminatory 
or preferential, and in the public interest, whether fees 
proposed to be assessed within the region are just, reason-
able, not unduly discriminatory or preferential, and in the 
public interest and any other responsibilities requested by 
the Commission. The Commission may give deference to 
the advice of any such regional advisory body if that body 
is organized on an interconnection-wide basis. 
‘‘(l) APPLICATION TO ALASKA AND HAWAII.—The 
provisions of this section apply only to the contiguous 48 
States.’’. 
TITLE VI—MARKET-BASED INI-
TIATIVES TO REDUCE GREEN-
HOUSE GASES 
SEC. 600. 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—
331
(A) regulations promulgated under section 
611(c)(1); and 
(B) relevant standards and methods devel-
oped under this title. 
(3) CARBON DIOXIDE EQUIVALENTS.—The term 
‘‘carbon dioxide equivalents’’ means, for each green-
house gas, the amount of each such greenhouse gas 
that makes the same contribution to global warming 
as one metric ton of carbon dioxide, as determined 
by the Administrator. 
(4) COVERED
SECTORS.—The term ‘‘covered 
sectors’’ means the electricity, transportation, indus-
try, and commercial sectors, as such terms are used 
in the Inventory. 
(5) 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 petroleum products for use in 
transportation, 
or 
produces 
or 
imports
332
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 produces or imports—
(i) petroleum products that, when 
combusted, will emit, 
(ii) 
hydrofluorocarbons, 
perfluorocarbons, or sulfur hexafluoride 
that, when used, will emit, or 
(iii) other greenhouse gases that, 
when used, will emit, 
over 10,000 metric tons of greenhouse gas per 
year, measured in units of carbon dioxide 
equivalents. 
(6) DATABASE.—The term ‘‘database’’ means 
the national greenhouse gas database established 
under section 611. 
(7) DIRECT
EMISSIONS.—The term ‘‘direct 
emissions’’ means greenhouse gas emissions by an 
entity from a facility that is owned or controlled by 
that entity. 
(8) FACILITY.—The term ‘‘facility’’ means a 
building, structure, or installation located on any 1
333
or more contiguous or adjacent properties of an enti-
ty in the United States. 
(9) GREENHOUSE GAS.—The term ‘‘greenhouse 
gas’’ means—
(A) carbon dioxide; 
(B) methane; 
(C) nitrous oxide; 
(D) hydrofluorocarbons; 
(E) perfluorocarbons; or 
(F) sulfur hexafluoride. 
(10) 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. 
(11) 
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. 
(12) LEAKAGE.—The term ‘‘leakage’’ means—
(A) an increase in greenhouse gas emis-
sions by one facility or entity caused by a re-
334
duction in greenhouse gas emissions by another 
facility or entity; or 
(B) a decrease in sequestration that is 
caused by an increase in sequestration at an-
other location. 
(13) PERMANENCE.—The term ‘‘permanence’’ 
means the extent to which greenhouse gases that are 
sequestered will not later be returned to the atmos-
phere. 
(14) REGISTRY.—The term ‘‘registry’’ means 
the registry of greenhouse gas emission reductions 
established under section 611(b)(2). 
(15) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Commerce. 
(16) SEQUESTRATION.—
(A) IN GENERAL.—The term ‘‘sequestra-
tion’’ means the capture, long-term separation, 
isolation, or removal of greenhouse gases from 
the atmosphere. 
(B) INCLUSIONS.—The term ‘‘sequestra-
tion’’ includes—
(i) agricultural and conservation prac-
tices; 
(ii) reforestation; 
(iii) forest preservation; and
335
(iv) any other appropriate method of 
capture, long-term separation, isolation, or 
removal of greenhouse gases from the at-
mosphere, as determined by the Adminis-
trator. 
(C) EXCLUSIONS.—The term ‘‘sequestra-
tion’’ does not include—
(i) any conversion of, or negative im-
pact on, a native ecosystem; or 
(ii) any introduction of non-native 
species. 
(17) SOURCE
CATEGORY.—The term ‘‘source 
category’’ means a process or activity that leads to 
direct emissions of greenhouse gases, as listed in the 
Inventory. 
(18) STATIONARY
SOURCE.—The term ‘‘sta-
tionary source’’ means generally any source of 
greenhouse gases except those emissions resulting di-
rectly from an engine for transportation purposes. 
Subtitle 
A—Federal 
Climate 
Change Research and Related 
Activities 
SEC. 601. NATIONAL SCIENCE FOUNDATION FELLOWSHIPS. 
The Director of the National Science Foundation 
shall establish a fellowship program for students pursuing
336
graduate studies in global climate change, including capa-
bility in observation, analysis, modeling, paleoclimatology, 
consequences, and adaptation. 
SEC. 602. RESEARCH GRANTS. 
Section 105 of the Global Change Research Act of 
1990 (15 U.S.C. 2935) is amended—
(1) by redesignating subsection (c) as sub-
section (d); and 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) RESEARCH GRANTS.—
‘‘(1) COMMITTEE TO DEVELOP LIST OF PRI-
ORITY RESEARCH AREAS.—The Committee shall de-
velop a list of priority areas for research and devel-
opment on climate change that are not being ad-
dressed by Federal agencies. 
‘‘(2) DIRECTOR OF OSTP TO TRANSMIT LIST TO 
NSF.—The Director of the Office of Science and 
Technology Policy shall transmit the list to the Na-
tional Science Foundation. 
‘‘(3) FUNDING THROUGH NSF.—
‘‘(A) BUDGET
REQUEST.—The National 
Science Foundation shall include, as part of the 
annual request for appropriations for the 
Science and Technology Policy Institute, a re-
337
quest for appropriations to fund research in the 
priority areas on the list developed under para-
graph (1). 
‘‘(B) AUTHORIZATION.—For fiscal year 
2006 and each fiscal year thereafter, there are 
authorized to be appropriated to the National 
Science Foundation not less than $25,000,000, 
to be made available through the Science and 
Technology Policy Institute, for research in 
those priority areas.’’. 
SEC. 603. ABRUPT CLIMATE CHANGE RESEARCH. 
(a) IN GENERAL.—The Secretary, through the Na-
tional Oceanic and Atmospheric Administration, shall 
carry out a program of scientific research on potential ab-
rupt climate change designed—
(1) to develop a global array of terrestrial and 
oceanographic indicators of paleoclimate in order to 
sufficiently to identify and describe past instances of 
abrupt climate change; 
(2) to improve understanding of thresholds and 
nonlinearities in geophysical systems related to the 
mechanisms of abrupt climate change; 
(3) to incorporate these mechanisms into ad-
vanced geophysical models of climate change; and
338
(4) to test the output of these models against 
an improved global array of records of past abrupt 
climate changes. 
(b) ABRUPT CLIMATE CHANGE DEFINED.—In this 
section, the term ‘‘abrupt climate change’’ means a change 
in climate that occurs so rapidly or unexpectedly that 
human or natural systems may have difficulty adapting 
to it. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for fis-
cal year 2006 $60,000,000 to carry out this section, such 
sum to remain available until expended. 
SEC. 604. NIST GREENHOUSE GAS FUNCTIONS. 
Section 2(c) of the National Institute of Standards 
and Technology Act (15 U.S.C. 272(c)) is amended—
(1) by striking ‘‘and’’ after the semicolon in 
paragraph (21); 
(2) by redesignating paragraph (22) as para-
graph (23); and 
(3) by inserting after paragraph (21) the fol-
lowing: 
‘‘(22) perform research to develop enhanced 
measurements, calibrations, standards, and tech-
nologies which will facilitate activities that reduce 
emissions of greenhouse gases or increase sequestra-
339
tion of greenhouse gases, including carbon dioxide, 
methane, nitrous oxide, ozone, perfluorocarbons, 
hydrofluorocarbons, and sulfur hexafluoride; and’’. 
SEC. 605. DEVELOPMENT OF NEW MEASUREMENT TECH-
NOLOGIES. 
To facilitate implementation of section 614, the Sec-
retary shall initiate a program to develop, with technical 
assistance from appropriate Federal agencies, innovative 
standards and measurement technologies to calculate 
greenhouse gas emissions or reductions for which no accu-
rate or reliable measurement technology exists. The pro-
gram shall include—
(1) technologies (including remote sensing tech-
nologies) to measure carbon changes and other 
greenhouse gas emissions and reductions from agri-
culture, forestry, and other land use practices; and 
(2) technologies to calculate non-carbon dioxide 
greenhouse gas emissions from transportation. 
SEC. 606. ENHANCED ENVIRONMENTAL MEASUREMENTS 
AND STANDARDS. 
The National Institute of Standards and Technology 
Act (15 U.S.C. 271 et seq.) is amended—
(1) by redesignating sections 17 through 32 as 
sections 18 through 33, respectively; and 
(2) by inserting after section 16 the following:
340
‘‘SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES. 
‘‘(a) IN GENERAL.—The Director shall establish 
within the Institute a program to perform and support re-
search on global climate change standards and processes, 
with the goal of providing scientific and technical knowl-
edge applicable to the reduction of greenhouse gases (as 
defined in section 600 of the New Apollo Energy Act of 
2005) and of facilitating implementation of section 614 
of that Act. 
‘‘(b) RESEARCH PROGRAM.—
‘‘(1) IN GENERAL.—The Director is authorized 
to conduct, directly or through contracts or grants, 
a global climate change standards and processes re-
search program. 
‘‘(2) RESEARCH PROJECTS.—The specific con-
tents and priorities of the research program shall be 
determined in consultation with appropriate Federal 
agencies, including the Environmental Protection 
Agency, the National Oceanic and Atmospheric Ad-
ministration, and the National Aeronautics and 
Space Administration. The program generally shall 
include basic and applied research—
‘‘(A) to develop and provide the enhanced 
measurements, calibrations, data, models, and 
reference material standards which will enable 
the monitoring of greenhouse gases;
341
‘‘(B) to assist in establishing a baseline 
reference point for future trading in greenhouse 
gases and the measurement of progress in emis-
sions reduction; 
‘‘(C) that will be exchanged internationally 
as scientific or technical information which has 
the stated purpose of developing mutually rec-
ognized measurements, standards, and proce-
dures for reducing greenhouse gases; and 
‘‘(D) to assist in developing improved in-
dustrial processes designed to reduce or elimi-
nate greenhouse gases. 
‘‘(c) NATIONAL MEASUREMENT LABORATORIES.—
‘‘(1) IN GENERAL.—In carrying out this sec-
tion, the Director shall utilize the collective skills of 
the National Measurement Laboratories of the Na-
tional Institute of Standards and Technology to im-
prove the accuracy of measurements that will permit 
better understanding and control of industrial chem-
ical processes and result in the reduction or elimi-
nation of greenhouse gases. 
‘‘(2) MATERIAL, PROCESS, AND BUILDING RE-
SEARCH.—The National Measurement Laboratories 
shall conduct research under this subsection that in-
cludes—
342
‘‘(A) developing material and manufac-
turing processes which are designed for energy 
efficiency and reduced greenhouse gas emissions 
into the environment; 
‘‘(B) developing chemical processes to be 
used by industry that, compared to similar 
processes in commercial use, result in reduced 
emissions of greenhouse gases or increased se-
questration of greenhouse gases; and 
‘‘(C) enhancing building performance with 
a focus in developing standards or tools which 
will help incorporate low- or no-emission tech-
nologies into building designs. 
‘‘(3) STANDARDS
AND
TOOLS.—The National 
Measurement Laboratories shall develop standards 
and tools under this subsection that include software 
to assist designers in selecting alternate building 
materials, performance data on materials, artificial 
intelligence-aided design procedures for building sub-
systems and ‘smart buildings’, and improved test 
methods and rating procedures for evaluating the 
energy performance of residential and commercial 
appliances and products. 
‘‘(d) NATIONAL VOLUNTARY LABORATORY ACCREDI-
TATION PROGRAM.—The Director shall utilize the Na-
343
tional Voluntary Laboratory Accreditation Program under 
this section to establish a program to include specific cali-
bration or test standards and related methods and proto-
cols assembled to satisfy the unique needs for accredita-
tion in measuring the production of greenhouse gases. In 
carrying out this subsection the Director may cooperate 
with other departments and agencies of the Federal Gov-
ernment, State and local governments, and private organi-
zations.’’. 
SEC. 607. TECHNOLOGY DEVELOPMENT AND DIFFUSION. 
The Director of the National Institute of Standards 
and Technology, through the Manufacturing Extension 
Partnership Program, may develop a program to promote 
the use, by the more than 380,000 small manufacturers, 
of technologies and techniques that result in reduced emis-
sions of greenhouse gases or increased sequestration of 
greenhouse gases. 
SEC. 608. AGRICULTURAL OUTREACH PROGRAM. 
(a) IN GENERAL.—The Secretary of Agriculture, act-
ing through the Global Change Program Office and in 
consultation with the heads of other appropriate depart-
ments and agencies, shall establish the Climate Change 
Education and Outreach Initiative Program to educate, 
and reach out to, agricultural organizations and individual 
farmers on global climate change.
344
(b) PROGRAM COMPONENTS.—The program—
(1) shall be designed to ensure that agricultural 
organizations and individual farmers receive detailed 
information about—
(A) the potential impact of climate change 
on their operations and well-being; 
(B) market-driven economic opportunities 
that may come from storing carbon in soils and 
vegetation, including emerging private sector 
markets for carbon storage; and 
(C) techniques for measuring, monitoring, 
verifying, and inventorying such carbon capture 
efforts; 
(2) may incorporate existing efforts in any area 
of activity referenced in paragraph (1) or in related 
areas of activity; 
(3) shall provide—
(A) outreach materials to interested par-
ties; 
(B) workshops; and 
(C) technical assistance; and 
(4) may include the creation and development 
of regional centers on climate change or coordination 
with existing centers (including such centers within
345
NRCS and the Cooperative State Research Edu-
cation and Extension Service). 
SEC. 609. NOAA REPORT ON CLIMATE CHANGE EFFECTS; 
PREPARATION ASSISTANCE. 
The Coastal Zone Management Act of 1972 (16 
U.S.C. 1451 et seq.) is amended by adding at the end 
the following: 
‘‘REPORT ON EFFECTS OF CLIMATE CHANGE 
‘‘SEC. 320. (a) IN GENERAL.—The Secretary shall 
report to the Congress not later than 2 years after the 
date of enactment of this section, and every 5 years there-
after, on the possible and projected impacts of climate 
change on—
‘‘(1) oceanic and coastal ecosystems, including 
marine fish and wildlife and their habitat, and the 
commercial and recreational fisheries and tourism 
industries associated with them; and 
‘‘(2) coastal communities, including private resi-
dential and commercial development and public in-
frastructure in the coastal zone. 
‘‘(b) CONTENTS.—Each report under this section 
shall include information regarding—
‘‘(1) the impacts that may be due to climate 
change that have occurred as of the date of the sub-
mission of the report; and
346
‘‘(2) the projected future impacts of climate 
change. 
‘‘(c) IMPACTS.—The impacts reported on under sub-
section (b) shall include any—
‘‘(1) increases in sea level; 
‘‘(2) increases in storm activity and intensity; 
‘‘(3) increases in floods, droughts, and other ex-
tremes of weather; 
‘‘(4) increases in the temperature of the air and 
the water on oceanic and coastal ecosystems, with a 
particular focus on vulnerable fisheries and eco-
systems; and 
‘‘(5) changes in the acidity of the ocean surface 
associated with an increase in concentration of car-
bon dioxide in the atmosphere. 
‘‘CLIMATE CHANGE PREPARATION ASSISTANCE 
‘‘SEC. 321. (a) IN GENERAL.—The Secretary shall 
provide technical assistance to each coastal state that has 
an approved coastal zone management plan under this 
title, to assist such States in preparing persons living with-
in their coastal zones to adapt to climate change. 
‘‘(b) IDENTIFICATION OF AFFECTED AREAS AND AD-
APTATIONS.—In carrying out this section, the Secretary 
shall—
347
‘‘(1) identify the projected impacts of climate 
change to which persons located in coastal zones 
may need to adapt, including—
‘‘(A) increases in sea level; 
‘‘(B) increases in storm activity and inten-
sity; and 
‘‘(C) increases in floods, droughts, and 
other extremes of weather; 
‘‘(2) identify the specific coastal areas of the 
United States, and the public and private develop-
ment in coastal communities and the natural re-
sources of the coastal zone, that are vulnerable to 
the impacts identified under paragraph (1); 
‘‘(3) identify the various adaptation measures 
that may be used to protect the areas and resources 
identified under paragraph (2) from the impacts 
identified under paragraph (1); and 
‘‘(4) estimate the costs of the adaptation meas-
ures identified under paragraph (3).’’. 
Subtitle B—National Greenhouse 
Gas Database 
SEC. 611. NATIONAL GREENHOUSE GAS DATABASE AND 
REGISTRY ESTABLISHED. 
(a) ESTABLISHMENT.—As soon as practicable after 
the date of enactment of this Act, the Administrator, in
348
coordination with the Secretary, the Secretary of Energy, 
the Secretary of Agriculture, and private sector and non-
governmental organizations, shall establish, operate, and 
maintain a database, to be known as the ‘‘National Green-
house Gas Database’’, to collect, verify, and analyze infor-
mation 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 greenhouse gas sequestra-
tions. 
(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-
porting, inventorying, and reductions registration. 
(2) REQUIREMENTS.—The Administrator shall 
ensure, to the maximum extent practicable, that—
(A) the comprehensive system described in 
paragraph (1) is designed to—
349
(i) maximize completeness, trans-
parency, and accuracy of information re-
ported; and 
(ii) minimize costs incurred by entities 
in measuring and reporting greenhouse gas 
emissions; and 
(B) the regulations promulgated under 
paragraph (1) establish procedures and proto-
cols necessary—
(i) to prevent the double-counting of 
greenhouse gas emissions or emission re-
ductions 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 
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;
350
(v) to account for changes in registra-
tion of ownership of emission reductions 
resulting from a voluntary private trans-
action between reporting entities; and 
(vi) to clarify the responsibility for re-
porting 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—
(A) for the verification of submitted emis-
sions reductions registered under section 613; 
(B) for the provision of unique serial num-
bers to identify the registered emission reduc-
tions made by an entity relative to the baseline 
of the entity; 
(C) for the tracking of the registered re-
ductions associated with the serial numbers; 
and 
(D) for such action as may be necessary to 
prevent counterfeiting of the registered reduc-
tions.
351
SEC. 612. INVENTORY OF GREENHOUSE GAS EMISSIONS 
FOR COVERED ENTITIES. 
(a) IN GENERAL.—Not later than July 1st of each 
calendar year after 2008, 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 (as reported at the facility level), including—
(1) the total quantity of direct greenhouse gas 
emissions from stationary sources, expressed in units 
of carbon dioxide equivalents, except those reported 
under paragraph (3); 
(2) the amount of petroleum products sold or 
imported by the entity 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 in the United 
States, as determined by the Administrator under 
section 621(b); 
(3) 
the 
amount 
of 
hydrofluorocarbons, 
perfluorocarbons, or sulfur hexafluoride, expressed 
in units of carbon dioxide equivalents, that are sold 
or imported by the entity and will ultimately be 
emitted in the United States, as determined by the 
Administrator under section 621(d); and 
(4) such other categories of emissions as the 
Administrator determines in the regulations promul-
352
gated under section 611(c)(1) may be practicable 
and useful for the purposes of this Act, such as—
(A) indirect emissions from imported elec-
tricity, heat, and steam; 
(B) process and fugitive emissions; and 
(C) production or importation of green-
house gases. 
(b) COLLECTION AND ANALYSIS OF DATA.—The Ad-
ministrator shall collect and analyze information reported 
under subsection (a) for use under subtitle C. 
SEC. 613. GREENHOUSE GAS REDUCTION REPORTING. 
(a) IN GENERAL.—Subject to the requirements de-
scribed in subsection (b)—
(1) a covered entity may register greenhouse 
gas emission reductions achieved after 1990 and be-
fore 2010 under this section; and 
(2) an entity that is not a covered entity may 
register greenhouse gas emission reductions 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
353
(B) submit the report described in sub-
section (c)(1). 
(2) REQUIREMENTS APPLICABLE TO ENTITIES 
ENTERING INTO CERTAIN AGREEMENTS.—An entity 
that enters into an agreement with a participant in 
the registry for the purpose of a carbon sequestra-
tion project shall not be required to comply with the 
requirements specified in paragraph (1) unless that 
entity is required to comply with the requirements 
by reason of an activity other than the agreement. 
(c) REPORTS.—
(1) REQUIRED REPORT.—Not later than July 
1st of each calendar year beginning more than 2 
years after the date of enactment of this Act, but 
subject to paragraph (3), an entity described in sub-
section (a) shall submit to the Administrator a re-
port that states, for the preceding calendar year, the 
entity-wide greenhouse gas emissions (as reported at 
the facility level), including—
(A) the total quantity of direct greenhouse 
gas emissions from stationary sources, ex-
pressed in units of carbon dioxide equivalents; 
(B) the amount of petroleum products sold 
or imported by the entity and the amount of 
greenhouse gases, expressed in units of carbon
354
dioxide equivalents, that would be emitted when 
these products are used for transportation in 
the United States, as determined by the Admin-
istrator under section 621(b); 
(C) the amount of hydrofluorocarbons, 
perfluorocarbons, or sulfur hexafluoride, ex-
pressed in units of carbon dioxide equivalents, 
that are sold or imported by the entity and will 
ultimately be emitted in the United States, as 
determined by the Administrator under section 
621(d); and 
(D) such other categories of emissions as 
the Administrator determines in the regulations 
promulgated under section 611(c)(1) may be 
practicable and useful for the purposes of this 
Act, such as—
(i) indirect emissions from imported 
electricity, heat, and steam; 
(ii) process and fugitive emissions; 
and 
(iii) production or importation of 
greenhouse gases. 
(2) VOLUNTARY
REPORTING.—An entity de-
scribed in subsection (a) may (along with estab-
355
lishing a baseline and reporting emissions under this 
section)—
(A) submit a report described in paragraph 
(1) before the date specified in that paragraph 
for 
the 
purposes 
of 
achieving 
and 
commoditizing 
greenhouse 
gas 
reductions 
through use of the registry and for other pur-
poses; and 
(B) submit to the Administrator, for inclu-
sion in the registry, information that has been 
verified in accordance with regulations promul-
gated under section 611(c)(1) and that relates 
to—
(i) any activity that resulted in the 
net reduction of the greenhouse gas emis-
sions of the entity or a net increase in se-
questration by the entity that were carried 
out during or after 1990 and before the es-
tablishment of the database, verified in ac-
cordance with regulations promulgated 
under section 611(c)(1), and submitted to 
the Administrator before the date that is 4 
years after the date of enactment of this 
Act; and
356
(ii) with respect to the calendar year 
preceding the calendar year in which the 
information is submitted, any project or 
activity that resulted in the net reduction 
of the greenhouse gas emissions of the en-
tity or a net increase in net sequestration 
by the entity. 
(3) PROVISION OF VERIFICATION INFORMATION 
BY REPORTING ENTITIES.—Each entity that submits 
a report under this subsection shall provide informa-
tion sufficient for the Administrator to verify, in ac-
cordance with measurement and verification methods 
and standards developed under section 614, that the 
greenhouse gas report of the reporting entity—
(A) has been accurately reported; and 
(B) in the case of each voluntary report 
under paragraph (2), represents—
(i) actual reductions in direct green-
house gas emissions—
(I) relative to historic emission 
levels of the entity; and 
(II) after accounting for any in-
creases in indirect emissions described 
in paragraph (1)(D)(i); or
357
(ii) actual increases in net sequestra-
tion. 
(4) FAILURE TO SUBMIT REPORT.—An entity 
that participates or has participated 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 621. 
(5) 
INDEPENDENT
THIRD-PARTY 
VERIFICATION.—To meet the requirements of this 
section and section 614, an entity that is required 
to submit a report under this section may—
(A) 
obtain 
independent 
third-party 
verification; and 
(B) present the results of the third-party 
verification to the Administrator. 
(6) AVAILABILITY OF DATA.—
(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.
358
(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 poses a risk to national security 
or discloses confidential business information 
that cannot be derived from information that is 
otherwise publicly available and that would 
cause competitive harm if published. 
(7) 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 in effect as of 
the date of enactment of this Act. 
(8) ADDITIONAL ISSUES TO BE CONSIDERED.—
In promulgating the regulations under section 
611(c)(1) and implementing the database, the Ad-
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
359
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 fossil 
fuels, greenhouse gas emissions, and greenhouse 
gas production and importation data are ade-
quate 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—
(1) describes the total greenhouse gas emissions 
and emission reductions reported to the database 
during the year covered by the report; 
(2) provides entity-by-entity and sector-by-sec-
tor analyses of the emissions and emission reduc-
tions reported;
360
(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 period in the trading of greenhouse gas 
emission allowances. 
SEC. 614. MEASUREMENT AND VERIFICATION. 
(a) STANDARDS.—
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Secretary 
shall establish by rule, in coordination with the Ad-
ministrator, the Secretary of Energy, and the Sec-
retary of Agriculture, comprehensive measurement 
and verification methods and standards to ensure a 
consistent and technically accurate record of green-
house gas emissions, emission reductions, sequestra-
tion, and atmospheric concentrations for use in the 
registry. 
(2) REQUIREMENTS.—The methods and stand-
ards established under paragraph (1) shall include—
(A) a requirement that a covered entity 
use a continuous emissions monitoring system, 
or another system of measuring or estimating 
emissions that is determined by the Secretary
361
to provide information with precision, reli-
ability, accessibility, and timeliness similar to 
that provided by a continuous emissions moni-
toring system where technologically 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; 
(iii) avoidance of double counting of 
greenhouse gas emissions and emission re-
ductions; 
(iv) protocols to prevent a covered en-
tity from avoiding the requirements of this 
Act by reorganization into multiple entities 
that are under common control; and 
(v) such other factors as the Sec-
retary, in consultation with the Adminis-
trator, determines to be appropriate; 
(C) establishment of methods of—
362
(i) estimating greenhouse gas emis-
sions, for those cases in which the Sec-
retary determines that methods of moni-
toring, measuring or estimating such emis-
sions with precision, reliability, accessi-
bility, and timeliness similar to that pro-
vided 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, avoid, or sequester greenhouse 
gas emissions; 
(E) in coordination with the Secretary of 
Agriculture, standards to measure the results of 
the use of carbon sequestration and carbon re-
capture technologies, including—
(i) soil carbon sequestration practices; 
and 
(ii) forest preservation and reforest-
ation activities that adequately address the 
issues 
of 
permanence, 
leakage, 
and 
verification;
363
(F) establishment of such other measure-
ment and verification standards as the Sec-
retary, in consultation with the Secretary of Ag-
riculture, the Administrator, and the Secretary 
of Energy, determines to be appropriate; 
(G) establishment of standards for obtain-
ing the Secretary’s approval of the suitability of 
geological storage sites that include evaluation 
of both the geology of the site and the entity’s 
capacity to manage the site; and 
(H) establishment of other features that, 
as determined by the Secretary, will allow enti-
ties to adequately establish a fair and reliable 
measurement and reporting system. 
(b) REVIEW AND REVISION.—The Secretary shall pe-
riodically review, and revise as necessary, the methods and 
standards developed under subsection (a). 
(c) PUBLIC PARTICIPATION.—The Secretary shall—
(1) 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 sub-
section (a); and 
(2) after the 90-day period referred to in para-
graph (1), in coordination with the Secretary of En-
ergy, the Secretary of Agriculture, and the Adminis-
364
trator, adopt the methods and standards developed 
under subsection (a) for use in implementing the 
database. 
(d) EXPERTS AND CONSULTANTS.—
(1) IN GENERAL.—The Secretary may obtain 
the services of experts and consultants in the private 
and nonprofit sectors 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 Sec-
retary may use any available grant, contract, cooper-
ative agreement, or other arrangement authorized by 
law. 
Subtitle C—Market-driven 
Greenhouse Gas Reductions 
CHAPTER 1—EMISSION REDUCTION RE-
QUIREMENTS; USE OF TRADEABLE AL-
LOWANCES 
SEC. 621. COVERED ENTITIES MUST SUBMIT ALLOWANCES 
FOR EMISSIONS. 
(a) IN GENERAL.—Beginning with calendar year 
2010—
365
(1) each covered entity in the electric genera-
tion, industrial, 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 stationary 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 will ultimately be emitted in the United States, 
as determined by the Administrator under sub-
section (d) and 
(3) each petroleum refiner or importer that is 
a covered entity shall submit one tradeable allowance 
for every unit of petroleum product it sells that will 
produce one metric ton of greenhouse gases, meas-
ured in units of carbon dioxide equivalents, as deter-
mined by the Administrator under subsection (b), 
when used for transportation.
366
(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 emitted when petroleum products are used for trans-
portation. 
(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 614(a)(2)(G); 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
HYDROFLUROCARBON, 
PERFLUOROCARBON, 
AND
SULFUR
HEXAFLUORIDE 
AMOUNT.—The 
Administrator 
shall 
determine 
the 
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.
367
SEC. 622. COMPLIANCE. 
(a) IN GENERAL.—
(1) SOURCE
OF
TRADEABLE
ALLOWANCES 
USED.—A covered entity may use a tradeable allow-
ance to meet the requirements of this section with-
out regard to whether the tradeable allowance was 
allocated to it under chapter 2 or acquired from an-
other entity or the Climate Change Credit Corpora-
tion established under section 641. 
(2) VERIFICATION
BY
ADMINISTRATOR.—At 
various times during each year, the Administrator 
shall determine whether each covered entity has met 
the requirements of this section. In making that de-
termination, the Administrator shall—
(A) take into account the tradeable allow-
ances submitted by the covered entity to the 
Administrator; and 
(B) retire the serial number assigned to 
each such tradeable allowance. 
(b) ALTERNATIVE MEANS OF COMPLIANCE.—For the 
years after 2010, a covered entity may satisfy up to 15 
percent of its total allowance submission requirement 
under this section by—
(1) submitting tradeable allowances from an-
other nation’s market in greenhouse gas emissions 
if—
368
(A) the Secretary determines that the 
other nation’s system for trading in greenhouse 
gas emissions is complete, accurate, and trans-
parent and reviews that determination at least 
once every 5 years; 
(B) the other nation has adopted enforce-
able limits on its greenhouse gas emissions 
which the tradeable allowances were issued to 
implement; and 
(C) the covered entity certifies that the 
tradeable allowance has been retired unused in 
the other nation’s market; 
(2) submitting a registered net increase in se-
questration, as registered in the database, adjusted, 
if necessary, to comply with the accounting stand-
ards and methods established under section 651; 
(3) submitting a greenhouse gas emissions re-
duction (other than a registered net increase in se-
questration) that was registered in the database by 
a person that is not a covered entity; or 
(4) submitting credits obtained from the Ad-
ministrator under section 623. 
(c) DEDICATED PROGRAM FOR SEQUESTRATION IN 
AGRICULTURAL SOILS.—If a covered entity chooses to 
satisfy 15 percent of its total allowance submission re-
369
quirements under the provisions of subsection (b), it shall 
satisfy up to 1.5 percent of its total allowance submission 
requirement by submitting registered net increases in se-
questration in agricultural soils, as registered in the data-
base, adjusted, if necessary, to comply with the accounting 
standards and methods established under section 651. 
SEC. 623. BORROWING AGAINST FUTURE REDUCTIONS. 
(a) IN GENERAL.—The Administrator shall establish 
a program under which a covered entity may—
(1) receive a credit in the current calendar year 
for anticipated reductions in emissions in a future 
calendar year; and 
(2) use the credit in lieu of a tradeable allow-
ance to meet the requirements of this Act for the 
current calendar year, subject to the limitation im-
posed by section 622(b). 
(b) DETERMINATION OF TRADEABLE ALLOWANCE 
CREDITS.—The Administrator may make credits available 
under subsection (a) only for anticipated reductions in 
emissions that—
(1) are attributable to the realization of capital 
investments in equipment, the construction, recon-
struction, or acquisition of facilities, or the deploy-
ment of new technologies—
370
(A) for which the covered entity has exe-
cuted a binding contract and secured, or ap-
plied for, all necessary permits and operating or 
implementation authority; 
(B) that will not become operational within 
the current calendar year; and 
(C) that will become operational and begin 
to reduce emissions from the covered entity 
within 5 years after the year in which the credit 
is used; and 
(2) will be realized within 5 years after the year 
in which the credit is used. 
(c) CARRYING COST.—If a covered entity uses a cred-
it under this section to meet the requirements of this Act 
for a calendar year (referred to as the use year), the 
tradeable allowance requirement for the year from which 
the credit was taken (referred to as the source year) shall 
be increased by an amount equal to—
(1) 10 percent for each credit borrowed from 
the source year; multiplied by 
(2) the number of years beginning after the use 
year and before the source year. 
(d) MAXIMUM BORROWING PERIOD.—A credit from 
a year beginning more than 5 years after the current year