Applying Natural Climate Solutions

TABLE OF CONTENTS

OVERVIEW

1.1  What is the purpose of this chapter? This chapter:

A. Guides U.S. Fish and Wildlife Service (Service) application of carbon stewardship activities that occur on Service-managed lands and waters and on lands and waters the Service funds through financial assistance. It does this by: 

(1) Describing who can report carbon benefits when the Service works with a partner on projects that use Natural Climate Solutions (NCS);

(2) Establishing the importance of NCS as an option to meeting conservation challenges on public lands and waters that the Service manages; 

(3) Supporting voluntary, non-compensatory, and non-regulatory actions that reduce anthropogenic emissions of greenhouse gases or that maintain or enhance removal of greenhouse gases by the environment;

(4) Helping to ensure that the carbon benefits of any activities occurring on Service-managed lands and waters are accurately reported and not double-counted; and

(5) Encouraging Service programs and partners to engage in projects with incidental or explicit NCS components if those projects are consistent with the purposes of the program. This includes using NCS and carbon benefits to leverage Service funds and expertise. 

B. Ensures that the Service’s carbon stewardship activities, including activities occurring on Service-owned or managed lands and waters, support wildlife and habitat management and conservation.

C. Establishes the process for the Service to accept matching contributions or donations related to carbon benefits.

D. Encourages employees to and identifies requirements for working with partners to avoid carbon emissions and increase carbon sequestration while preserving our management authority and not placing new or undue burdens on employees. 

1.2 What is the scope of this chapter? 

A. This chapter applies to all Service programs, Regions, offices, and other organizational units.

B. This chapter does not apply to:

(1) Compensatory mitigation as described in the Service’s Mitigation Policy (501 FW 2) and Endangered Species Act Compensatory Mitigation Policy (501 FW 3), and

(2) Geological carbon sequestration (e.g., injecting carbon in subsurface pore space).

C. The chapter must be implemented in compliance with existing laws, regulations, and other Service policies.

1.3 What are the authorities for this chapter? Following are the most relevant authorities for this chapter:

A. Emergency Wetland Resources Act (16 U.S.C. 3901-3932).

B. Executive Order 14057, Catalyzing Clean Energy Industries and Jobs through Federal Sustainability.

C. Executive Order 14072, Strengthening the Nation’s Forests, Communities, and Local Economies.

D. Fish and Wildlife Act of 1956 (16 U.S.C. 742a-742j).

E. Fish and Wildlife Coordination Act (16 U.S.C. 661-666c).

F. Migratory Bird Hunting and Conservation Stamp Act (16 U.S.C. 718a-718h).

G. Migratory Bird Treaty Act of 1918 (16 U.S.C. 703-712).

H. National Wildlife Refuge System Administration Act of 1966, as amended by the National Wildlife Refuge System Improvement Act of 1997 (16 U.S.C. 668dd-668ee).

I. North American Wetlands Conservation Act (16 U.S.C. 4401).

J. Office of Management and Budget Guidance, Grants and Agreements (2 CFR 200).

K. 600 Department of the Interior Manual (DM) 7, Nature-Based Solutions.

1.4 What terms do you need to know to understand this chapter? 

A. Additionality refers to carbon benefits realized above baseline conditions that otherwise would not have occurred in the absence of a project or activity. 

B. Carbon benefit is the amount of carbon stored or emissions avoided above baseline conditions, however established, after deductions for leakage and impermanence. This includes carbon dioxide and other greenhouse gas pollutants, often measured as carbon dioxide equivalent units. 

C. Carbon credit is a tradeable certificate, permit, or other interest equivalent to some pre-assigned amount of carbon benefits. Credits are certified by entities to represent an emission reduction of some amount of carbon dioxide equivalent.

D. Carbon program is the entity that is paying for carbon offsetting activities. Carbon programs may verify and issue their own carbon credits, or they may rely on other entities for those activities. Carbon programs vary widely, and every model is slightly different.

E. Carbon stewardship refers to actions that increase carbon uptake or storage in biological matter, increase carbon stability through land use and vegetation management strategies, or sustain or avoid the loss of carbon to the atmosphere.

F. Climate change adaptation refers, in human systems, to the process of adjusting for the actual or expected climate and its effects in order to moderate harm or exploit beneficial opportunities. In natural systems, it refers to the process of adjusting to the actual climate and its effects. Human intervention in natural systems may help with this adjustment.

G. Co-benefits refer to the cumulative positive impacts on human well-being, ecosystems, and biodiversity resulting from implementation of Nature-Based Solutions (NBS), of which NCS is a subset that results in increases in carbon sequestration and avoided greenhouse gas emissions. Typical benefits include improvement in air quality; habitat resilience; biodiversity; food and fiber production; infrastructure protection; cultural resource protection; improvement in water quality and availability; better human health; improvement in recreational or commercial wildlife or fisheries; better soil health; and flood mitigation. 

H. Donation refers to things of value received by the Service or on behalf of the Service from a non-Federal source without consideration or an exchange of value. (See 212 FW 8.)

I. Geological carbon sequestration is a method of securing carbon dioxide in deep geological formations to prevent its release to the atmosphere and contribution to global warming as a greenhouse gas.

J. Leakage occurs when a project or activity achieves carbon benefits in one place but causes increased greenhouse gas emissions beyond the project boundary.

K. Mitigation,for the purposes of this chapter, refers to voluntary, non-compensatory, and non-regulatory actions that reduce or avoid anthropogenic emissions of a greenhouse gas or maintain or enhance removal of greenhouse gases by the environment. Mitigation activities may be implemented at different scales and could be projects, programmatic approaches, or policies.

L. Natural Climate Solutions (NCS) are a subset of NBS and include actions to protect, sustainably manage, and restore habitats while simultaneously storing carbon or avoiding greenhouse gas emissions (e.g., maintaining or restoring healthy grasslands, forests, and peatlands) and providing additional co-benefits (e.g., flood protection and human community resiliency against climate-induced natural hazards).

M. Nature-Based Solutions (NBS) are actions to protect, sustainably manage, or restore natural or modified ecosystems to address societal challenges, while simultaneously providing benefits for people and the environment. 

N. Permanence refers to long-term carbon benefits that persist and cannot be easily reversed in the absence of unforeseeable events.

O. Stewardship means the fulfilment of the Service’s management responsibilities for Federal lands and water resources. This includes authorized development activities; management of vegetation, fish, wildlife, and other resources; protection of cultural resources; and the provision of recreational and educational opportunities on Federal lands and waters. Carbon stewardship, defined above, is a specific type of stewardship. 

P. Sustainability means to create and maintain the conditions under which humans and nature can exist in productive harmony to support present and future generations. (See 565 FW 1.)

1.5 What is the Service’s overall policy on Natural Climate Solutions (NCS)? It is the policy of the Department of the Interior (Department) to implement NBS to the maximum extent practicable and as permitted by law.As a subset of NBS, the Service's policy is to consider and prioritize NCS or NCS-related actions when those actions align with the Service's core mission or specific program missions, mandates, or objectives. 

A. Because of their ability to balance greenhouse gas emissions, the Service may rely on carbon benefits generated by NCS and carbon stewardship projects to meet its sustainability goals. Therefore, it is the policy of the Service to prioritize NCS over non-NCS in our portfolio of actions to manage lands and waters to support our sustainability goals if the NCS actions are consistent with wildlife and habitat management goals and objectives and are likely to provide comparable or greater benefits in terms of accomplishing those goals and objectives.

B. Effective implementation of NCS to maximize co-benefits for fish and wildlife and their habitats requires ongoing science and adaptive management. As a result, uncertainty regarding impacts of the NCS being implemented and co-benefits for fish and wildlife and their habitats may exist. Consistent with the Service’s management of fish and wildlife and their habitats, and in alignment with 600 DM 7, it is Service policy to seek out and implement new and innovative NCS using the best available evidence and expertise, including local and Indigenous Knowledge. 

C. It is Service policy to continually improve the effectiveness, efficiency, and equity of NCS actions by using evidence from project measurements or monitoring, including using data from project partners.

D. It is Service policy to ensure that all of our employees and programs are empowered to promote and expand our and our partners’ application of NCS, particularly on Service-owned and managed lands and waters, to:

(1) Promote climate change climate change
Climate change includes both global warming driven by human-induced emissions of greenhouse gases and the resulting large-scale shifts in weather patterns. Though there have been previous periods of climatic change, since the mid-20th century humans have had an unprecedented impact on Earth's climate system and caused change on a global scale.

Learn more about climate change adaptation and build or enhance capacity to prevent, withstand, respond to, and recover from a disruption caused by climate change; 

(2) Enhance carbon uptake and storage and climate change mitigation potential to meet sustainability goals;

(3) Work with partners to use landscape-level approaches to support the implementation of NCS actions (604 DM 1);

(4) Deliver effective and measurable co-benefits for ecological and human communities; and

(5) Promote equity, justice, community involvement, and partnership engagement in ensuring equitable benefits from NCS actions consistent with the Department’s NBS policy (600 DM 7).

E. Where feasible, the Service must prioritize carbon stewardship projects and activities that result in outcomes that address additionality, permanence, and leakage. Where NCS projects have exceptional benefits for fish and wildlife and their habitats but do not explicitly or adequately address additionality, permanence, or leakage, the Service may still choose to prioritize those projects. If a carbon stewardship project does not adequately address additionality, permanence, or leakage, the Service must carefully consider whether the resulting carbon benefits are appropriate for meeting Service sustainability goals.

F. Employees must not construe anything in this policy as prioritizing NCS or sustainability goals above program missions and mandates, including habitat and wildlife management goals and objectives.

G. Nothing in this policy gives anyone outside of the Service any interest in real property or right to encumber title to Service-owned or Service-managed property. Nothing in this policy provides any right to direct or control the administration of Service units or other Service-owned or Service-managed properties to any greater extent than is afforded any member of the general public under applicable Service laws, policies, and regulations.

RESPONSIBILITIES

1.6 Who is responsible for addressing NCS? See Table 1-1.

Table 1-1: Responsibilities for NCS

NATURAL CLIMATE SOLUTIONS REQUIREMENTS

1.7 May the Service generate market-based carbon credits? The Service must not generate or hold market-based carbon credits. The Service may accept donations of goods, services, or property, such as restoration activities or land, in exchange for a partner’s right to report carbon benefits.

1.8 How may the Service accept donations of goods, services, or property (such as restoration activities or land) where partners retain the rights to report carbon benefits? 

A. When the right to report carbon benefits is retained by a partner, the partner should demonstrate that the additionality, leakage, and permanence requirements in this policy are met.Potential projects yielding reportable carbon benefits must show additionality and permanence and minimize leakage. The Service may request additional information from the partner as necessary to ensure that the requirements of this chapter are met using best available science.

B. The Service may accept donations where partners retain the rights to report carbon benefits when we:

(1) Follow any applicable existing donation policy or guidance for land, cash, or in-kind services, such as the Service’s policy at 212 FW 8, Donations, Fundraising, and Solicitation Activities on Behalf of the Service; and the Departmental policy at 374 DM 6, Donations. An approved form must be used (e.g., DI-3680, FWS Form 3-2561). Also, Service policies 342 FW 5 and 602 FW 2 on non-purchase acquisition and preacquisition planning must be followed when accepting a donation of land.

(2) Ensure the partner applies for and follows any conditions in a Service special use permit, as applicable.

(3) Have a binding agreement, such as an MOU/MOA or other instrument, that memorializes the agreements, conditions, roles, and responsibilities for all parties.

C. Any MOU/MOA with partners must include language that Service management priorities come before goals related to generating carbon benefits or credits. If there is a conflict between Service management goals and objectives and carbon stewardship activities, Service management goals and objectives must take precedence.

D. Any MOU/MOA with partners must also note that the Service in no way warrants that our activities will afford our partners any future value in the form of reporting carbon benefits.

E. Any activities must be in compliance with the laws, regulations, policies, and guidelines the Service must follow, including compatibility and appropriateness where applicable, such as 603 FW 2.

F. If any change in law, regulation, or policy rescinds or modifies the Service’s authority to enter into carbon-based restoration partnerships, the Service must notify partners of the change in law, regulation, or policy and describe any required changes or the need for termination of the agreement.

G. For donations related to NCS, the Service must commit to managing the donation consistent with Service stewardship responsibilities and in accordance with the NCS project goals described in the project agreement. The Service must provide project partners with access for monitoring in accordance with those goals for the intended project duration, subject to available funds and applicable Federal laws and regulations currently in effect and any that may subsequently be enacted or promulgated.

H. Before there is a conveyance of property rights to the Service that is subject to an outstanding carbon or climate encumbrance, it must be reviewed by the National Wildlife Refuge System’s Division of Realty, a title attorney, and, if applicable, the Refuge Manager to ensure compliance and acceptability. We recommend involvement with the Division of Realty early in the process.

1.9 How does the Service determine who may track and report carbon benefits on Service lands and waters?

A. Benefits resulting from carbon stewardship projects on Service lands and waters must not be double-counted; the carbon benefits associated with a project must only be reported one time. The Service and our partners must determine which entity will report carbon benefits on a case-by-case basis, subject to any prior existing agreements, and that determination must be included in the MOU or MOA. Lacking a written agreement, a partner or third party may not report carbon benefits that originate from Service lands and waters.

B. The Service may allow a partner to report carbon benefits for carbon stewardship activities on Service-owned or managed lands and waters. Examples include, but are not limited to, acquisitions and restorations of lands and waters. If a partner reports carbon benefits associated with a stewardship project, the Service must not report those same benefits. The Service may choose to track carbon benefits generated by partners on Service lands and waters for other purposes, but those carbon benefits do not help the Service meet sustainability goals, nor can they be used for purposes that would otherwise result in double-counting of benefits.

C. The Service may choose to track or report carbon benefits for its own use, either to meet internal sustainability goals or for other purposes. If the Service chooses to report carbon benefits associated with a carbon stewardship project, it must ensure that a partner does not report those same benefits. 

D. The Service must not be responsible for tracking and reporting carbon benefits that a partner claims.

1.10 How can the Service ensure that carbon activities relate to conservation? 

A. Carbon stewardship projects on Service lands and waters must be consistent with any authorizing purposes for the lands and waters in question and any applicable regulations, policies, or objectives.

(1) For national wildlife refuges, the Service must manage the project areas in accordance with the appropriate comprehensive conservation plans and other refuge management plans. The regulations in Subchapter C of Title 50 of the CFR are applicable to the project area. Carbon stewardship projects on refuges must be compatible with purposes of the specific refuge hosting the project and the mission of the National Wildlife Refuge System.

(2) Other lands and waters the Service purchased or manages under different programs may have different requirements or management priorities. Employees should consult program-specific policy and regulation for more information. 

B. Prior to implementing carbon stewardship projects on Service lands and waters, the Service must complete compliance actions where applicable, such as receiving authorization under U.S. Army Corps of Engineers permits, conducting National Environmental Policy Act analyses, and addressing any other laws, regulations, or related policies.

C. Carbon stewardship projects funded wholly or in part by Federal financial assistance must align with the eligible purposes of the financial assistance program. Carbon stewardship projects taking place on lands and waters purchased or managed with Federal financial assistance must not interfere with the purposes for which the land was acquired or managed under the Federal program. Employees should refer to applicable rules and regulations for further guidance. 

D. Carbon stewardship projects must demonstrate alignment with the Service’s policy on NCS as we describe in section 1.5.

1.11 What factors should the Service consider before working with a potential partner on an NCS project? The Service should consider the following:

A. Is the potential partner a local or State government agency or institution, Non-Governmental Organization (NGO), nonprofit organization, or a for-profit organization? When considering for-profit partners, the Service should carefully examine any additional conditions or terms that may be included that are not relevant when we work with NGO or other government entities. The Service must also determine whether there may be any possible conflicts of interest between the potential for-profit partner and the Service or the Department.  

B. Does the potential partner have a history of delivering on similar projects within identified timelines?

C. Can the potential partner demonstrate that it has the expertise and experience, including key personnel, necessary to be successful with the project? 

D. Does the potential partner maintain appropriate internal controls and administrative functions to effectively manage and implement the project in conformance with applicable requirements?

E. Can the potential partner demonstrate data management of attributes necessary to report accurate, reliable, and usable data, as we describe in 274 FW 1, Data Management?

1.12 When may the Service accept cash resulting from the sale of carbon benefits (in the form of carbon credits or otherwise) or participation in a voluntary carbon program as match towards a Federal award? 

A. The Service may accept cash from the monetization of carbon benefits or participation in a voluntary carbon program as match towards a Federal award if:

(1) There was no Federal funding used to develop the project from which the carbon benefits were generated or from the carbon program itself.

(2) The project that generated the carbon benefits did not occur on Service-owned or managed lands. 

B. If Federal funds were used to achieve carbon benefits as described in section 1.12A, the Service may accept resulting cash as match only if:

(1) Individual grant requirements allow it, and

(2) Federal statute or regulation allows the use of Federal funds as matching or cost sharing funds for another Federal award per the requirements in 2 CFR 200.306(b)(5) or any program-specific regulations or policy. 

1.13 May the Service accept the value of carbon benefits that have not been monetized as an in-kind contribution as match towards a Federal award? No. Consistent with section 1.12, the Service may only accept match towards a Federal award resulting from carbon benefits when the carbon benefit has been monetized. 

1.14 What should MOUs and MOAs include, and where should they be stored?

A. All MOUs/MOAs that relate to NCS should include, at a minimum, the following information:

(1) The project’s background, objectives, and purpose, including the wildlife and habitat goals and objectives.

(2) Authorities under which the project is conducted.

(3) The scope of the effort, including roles and responsibilities of all partners, including the Service.

(4) The project area and size.

(5) Service projects or units impacted by or relevant to the project.

(6) Partners involved in the project.

(7) Terms of the agreement.

(8) The period of performance of the project.

(9) If the project does not occur on Service lands and waters, a grant of sufficient access for Service management or monitoring purposes.

(10) Statement that Service management priorities come before goals related to generating carbon credits. If there is a conflict between Service management goals and objectives and the carbon stewardship activities, Service management goals must take precedence.

(11) A hold harmless clause stating the Service cannot be held liable if carbon benefits are not generated.

(12) An explanation of who may claim or report the carbon benefits generated by the project.

(13) Modification and termination provisions.

(14) Non-exclusivity provision.

(15) A liability clause.

(16) Mechanisms for dispute resolution.

(17) Activities requiring notice or prior approval, or both.

(18) A notice that the project will comply with Executive Order 11246, Equal Employment Opportunity.

(19) A statement that no member or delegate to Congress or resident commissioner is or will be a party.

(20) Liability enforcement provisions.

(21) Contact information for project officers.

B. The MOU/MOA should include the stipulations that the project will not result in any property interest or right in Service-owned or managed lands and waters on the part of the partner involved.

C. If the project will result in a property interest or right being transferred to or acquired by the Service, the appropriate attorneys in the Office of the Solicitor, staff from the Division of Realty, and the Project Leader (e.g., Refuge Manager) must be included in language negotiations.

D. All MOUs/MOAsmust be saved in a Service-approved data repository and must be made freely and publicly available to the extent practicable.