After almost eight months of negotiations and revisions (and much anticipation by the environmental community), the American Power Act bill was finally unveiled this week by Senators John Kerry (D-MA) and Joseph Lieberman (I-CT).
Within its 987 pages are many well-intentioned proposals to limit greenhouse gas emissions, reduce oil imports and create millions of jobs in the field of clean energy. Yet from our standpoint, the bill also contains significant shortcomings which will limit its success, such as addressing the deforestation of tropical forests worldwide.
Deforestation is one of the most significant sources of emissions that can be significantly reduced now. The best way to do this is through a partnership between governments and the private sector – leveraging the strengths of both. The American Power Act needs to provide a clear pathway to allow for immediate investments to stem deforestation, encourage U.S. companies to immediately invest in activities to strop deforestation, and help developing countries build up national programs to address deforestation.
Therefore, in order to make the American Power Act truly effective in the fight against climate change, it must do the following:
- Invest in developing markets . The United States should set aside funding from auction revenues of the bill’s trading program to help countries build their capacity to participate in offset markets.
- Foster private investment as soon as possible. Allow U.S. companies to purchase offsets from project level activities before the country has established a national system for trading offsets. This would be a short-term solution, while countries develop their national systems.
- Encourage early action. Allow investment made now by companies in deforestation projects to count for compliance in the bill’s trading program.
Allowing U.S. companies to purchase offsets for deforestation activities now provides a cost effective path for them to meet their compliance while directing critical resources to stopping deforestation. Not allowing this means more inaction – increased emissions from continued burning of forests and the increased loss of critical species and ecosystems.
Manuel Oliva is CI’s director of U.S. climate policy.