No regulations exist within section 25 of the Code of Federal Regulations (CFR) that deal with carbon credits or sequestration. According to the Bureau of Indian Affairs Office of Regulatory Affairs and Collaborative Action, carbon credit projects that involve leases for sequestration or emission reduction activities will be reviewed under 25 CFR 84 (Encumbrances of Tribal Land) for tribal land, and 25 CFR 169 (Rights-of-Way Over Indian lands) for allotted land. Easements are generally required between the project sponsor and developer or aggregator. While on non-Indian lands obtaining an easement between two private parties is typically a straight forward process, the regulatory oversight of the Bureau of Indian Affairs may or may not complicate carbon project development.
Until the regulations are developed, a potential alternative for tribes would be to seek leases under 25 U.S.C. 81 ("Section 81 agreements"). Section 81 allows tribes, but not individual Indian landowners, to enter into agreements encumbering the land for not more than seven years without BIA approval. Section 81 agreements encumbering tribal land for longer than seven years require BIA approval under 25 CFR 84. A seven-year lease agreement might be sufficient for emission reduction projects involving methane capture, cropland or rangeland management. However, forestry projects typically require longer periods if they include growing operations.
The sequestered amount of carbon or reduced emissions is measured, verified, monitored, and reported according to specific guidelines and protocols for either a voluntary registry or trading system. The American Carbon Registry, Climate Action Reserve, and Verified Carbon Standard are the three largest registries in North America for the voluntary carbon market. The California Air Resources Board is the administrative agency for California's regulatory cap and trade program.
Click here for information about best management practices for your land.
Carbon credit projects use land management practices that boost the ability of natural CO2 sinks like plants and soils to remove carbon as CO2 from the atmosphere. Opportunities for indirect sequestration are found in forests, grasslands, wetlands and croplands.
Carbon credit trading is a cost-effective solution toward mitigating environmental pollution that originated under the first Bush administration’s efforts to reduce acid rain.
Carbon credits in North America are currently traded on voluntary offset markets and through regional GHG compliance programs. Prices for carbon credits are higher in compliance programs because there is greater demand for credits from regulated entities.