SB3013 SD1.DOC

SECTION 1. The legislature finds that the State's natural environment and ecosystem are in a fragile position when considering the amount of greenhouse gases released through human activities and their contribution to global climate change.

As the most geographically isolated island in the world, Hawaii is at a crossroads. The harsh reality of global warming has put Hawaii in a dangerous position that not only increases our dependence on fossil fuels, but is also causing noticeable changes to the natural environment. Hawaii is expecting to experience detrimental environmental conditions in the near future including more severe storms, less rainfall, warmer temperatures that may favor invasive species, sea level rise, and ocean acidification that hampers coral growth. These climate changes will likely impose major, but not fully understood costs, and other impacts on Hawaii's people and the natural environment necessary to support life in the Pacific ocean. Nowhere is it more obvious than on isolated islands like Hawaii that our lives and economy are intertwined with the health and function of the natural world around us.

The legislature finds that the State needs to support programs that incentivize businesses and landowners to adopt and practice environmentally friendly actions that result in reduced carbon emissions into the environment. One such mechanism that has gained success in Europe after the Kyoto Protocol, has been the transferring and selling of carbon credits.

The purpose of this Act is to create a process for local businesses, individuals, and land owners to acknowledge the multitude of benefits related to investing in forest carbon offsets in Hawaii that would incentivize and reward businesses or individuals for keeping land designated as conservation or that adopt, practice, and adhere to carbon emission reduction activities, consistent with the Hawaii 2050 sustainability plan, over the long-term.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to title 12, subtitle 6, to be appropriately designated and to read as follows:

"Chapter

FOREST CARBON OFFSETS PROGRAM

§ -1 Definitions. As used in this chapter:

"Board" means the board of land and natural resources.

"Department" means the department of land and natural resources.

"Forest carbon offset" means a transferable unit based on a measured amount of carbon storage expressed as a carbon dioxide emission equivalent, or other equivalent standard, and accruing on forestland as live or dead matter in trees, shrubs, forest litter, and soil.

§ -2 Forest carbon offsets program. (a) The department shall establish a forest carbon offsets program to develop a process to identify forest management actions that contribute to carbon sequestration and offset credits that can be transferred or sold among public and private agencies in the State, on regulated or volunteer markets, to guarantee sustainable management of Hawaii's natural resources, ensure land conservation, and reduce carbon emissions.

(b) The department shall adopt rules pursuant to chapter 91 necessary to carry out the purposes of this chapter.

§ -3 Forest carbon offset. (a) A forest carbon offset is created by performing, financing, or otherwise causing one or more of the following activities:

(1) Reforestation of underproducing lands that are not otherwise subject to require reforestation;

(2) Forest management activities not required under law existing at the point of creation of the forest carbon offset, including but not limited to the following practices:

(A) Stand density control treatments in overstocked, underproducing stands of timber;

(B) Silivicultural practices that increase forest stand biomass, including but not limited to structure-based management, variable retention, uneven age management, longer rotation ages, and no harvest reserves;

(D) Deferred harvest rotations past fifty years or an appropriate time depending on the species, or the age of economic maturity, whichever is longer; and

(3) Other activities as defined by the board.

(b) The department shall only be responsible for identifying sustainable management activities for forest carbon offsets.

§ -4 Sustainable management. (a) The department shall develop a process for recognizing sustainable management of Hawaii's natural resources and the additional benefits related to forest carbon offsets. The process for the determination of sustainable management shall include:

(1) Accepted principles, standards, and best management practices relating to the management and restoration of Hawaiian natural resources;

(2) The effects of increasing carbon sequestration and storage on forestlands as measured by a third party or accredited forest carbon offset accounting system;

(3) Whether there is harm or deterioration of the natural resources of Hawaii; and

(4) Environmental, social, cultural, or economic benefits for the citizens of Hawaii, including but not limited to the protection or enhancement of long-term native fish and wildlife habitat and water quality.

(b) Rules adopted by the board under this section shall set standards to assure participants that forest carbon offsets to be transferred or sold as a result of forest management activities:

(1) Shall not harm or deteriorate the natural resources of Hawaii; and

(2) Shall provide environmental, social, cultural, or economic benefits for Hawaii and its citizens, including but not limited to the protection or enhancement of long-term native fish and wildlife habitat and water quality.

(c) Rules adopted by the board under this section shall establish principles to ensure that the forest carbon offset program shall:

(1) Include provisions for establishing the appropriate baseline for projects, practices, rotation ages, harvest schedules and ownership for which measured carbon dioxide emission debits, and credits for carbon storage or sequestration are made through a third party or accredited program;

(2) Ensure that specific forest management practices used on-site include verifiable provisions for monitoring carbon dioxide emission for carbon storage or sequestration, from the implementation of specific practices;

(3) Account for environmental, social, or economic benefits of forest carbon offsets and ensure that practices with unsustainable, long-term consequences are not used to create forest carbon offsets; and

(4) Encourage the use of reputable third-party verification of forest carbon offsets.

§ -5 Carbon offset transfer or sell. Nothing in this chapter shall prohibit any person or governmental agency from marketing, selling, or transferring forest carbon offsets. Rules adopted by the board shall not prohibit any person from marketing, selling, or transferring forest carbon offsets using principles and standards different than those adopted by the board.

§ -6 Fees. The board shall establish a processing fee for the identification of sustainable forest carbon offsets. Fees collected shall be deposited in the forest stewardship fund established under section 195F-4 to support forest management and restoration."

SECTION 3. This Act shall take effect on July 1, 2012.

THE SENATE	S.B. NO.	3013
TWENTY-SIXTH LEGISLATURE, 2012		S.D. 1
STATE OF HAWAII