2007 ANNUAL REPORT

Dear Environment North Carolina member,

You know as well as I do that North Carolina’s environment faces daunting challenges in the years ahead. North Carolina faces rapid growth and development—among the fastest in the nation. Scientists predict more violent hurricanes and a vanishing coastline if global warming is not held in check.

But it’s not all bad news. Every year I spend working to protect the environment, progress gets a little easier. Nowadays, it’s not about convincing people that the environment is in trouble—it’s about agreeing on the best way to protect it. We still face major opposition from powerful special interests, but with the support of North Carolinians, especially members like you, I’m hopeful about our chances.

As realistic as we are at Environment North Carolina about the challenges our state faces, we are pragmatic and optimistic about how to overcome them. That’s why we work aggressively for incremental reforms—like $128 million in new funding for land conservation (page 3), or winning protections for the North Fork First Broad River in western North Carolina (page 5).

In some cases, we have had to make hard choices about when to accept small steps toward a larger goal, and when to hold decision-makers to higher standards. We lauded the important steps the Legislature took towards cutting global warming pollution (page 7), but we drew the line at industry-friendly provisions in the same bill that would promote new coal and nuclear power plants.

In 2007, your support and assistance allowed us to stand up for our air, water and open spaces, and achieve real results for the state’s environment. Thank you for making both possible. Sincerely,

Elizabeth OuztsState Director

Elizabeth OuztsState Director

From our staff

Environment North Carolina

Margaret HartzellField Director

Anna AurilioFederal Legislative

Director

More than 17 percent of North Carolina’s children suffer from asthma, which is exacerbated by smog and soot pollution from vehicles and smokestacks.

Clean air

In April, the U.S. Supreme Court ruled 9-0 against Duke Energy, and in favor of Environment North Carolina and other petitioners, arguing that industrial smokestacks and power plants must meet today’s cost-effective pollution control standards when facilities are refurbished. The court’s decision could lead to a major re-duction of more than 1 million tons of dangerous pollution across the country.

Environment North Carolina advocacy also led to stricter emis-sions standards for vehicles in 2007. The federal government re-quires newly manufactured diesel trucks and buses to produce dramatically less emissions, but does not address the tens of thousands of older diesel vehicles still on the roads. The Environ-ment North Carolina-backed Clean School Bus Act, sponsored by Rep. Ruth Samuelson (Mecklenburg), creates a funding pro-gram to retrofi t older diesel school buses with pollution controls.

Victory: Smokestacks, buses to pollute less

Page 2

In July, lawmakers approved an Environment North Carolina-backed funding increase for the state’s land conservation programs. Our advocates worked with House Speaker Joe Hackney (Orange), legislative champions Rep. Lucy Allen (Franklin) and Sen. Charlie Albertson (Duplin), and the Land for Tomorrow coalition.

Over the past several years, Environment North Carolina has gath-ered nearly 10,000 petition signatures, researched and released numerous reports, and advocated for a substantial increase in funding for the state’s land conservation programs.

In 2008, Environment North Carolina will urge lawmakers to build on the $128 million increase in the 2008 short session of the Gen-eral Assembly, and fulfi ll their promise made in 2000, to preserve an additional million acres by the start of 2010.

Legislature approves conservation measure

Environment North Carolina

Our parks and open spaces

Topsail Island.

Page 4

North Carolina’s distinctive woodlands, farmlands and open spaces are disappearing at a rapid rate, and development across the state shows no sign of letting up. Those are the fi ndings of an April report, “Losing Our Natural Heritage,” from Environment North Carolina Research and Policy Center.

According to the report, between 1987 and 2007, North Carolina lost an estimated 2.37 million acres of farm and forest land. Over the same time period, the state’s population grew by 40 percent—remarkably fast, but not in comparison to the growth of developed acreage, which increased 65 percent.

“From the Smokies to the Outer Banks, and everything in between, our state’s natural beauty and rural character is quickly slipping away,” said Environment North Carolina Director Elizabeth Ouzts.

The state’s major metropolitan areas saw the most development, but major transformations also occurred in traditionally rural landscapes. The Triangle saw developed land more than double over the last twenty years. Development increased by more than 50 percent in the northeastern part of the state, and development overall in rural areas increased 54 percent.

“Losing Our Natural Heritage” gained coverage in dozens of news outlets across the state, including the Charlotte Observer, the News and Observer, and other major newspapers. This coverage helped to persuade decision-makers to allocate unprecedented funding for the state’s open space protection programs.

Research“Losing Our Natural Heritage”

Our rivers, lakes and streams

After nearly three years of deliberation, water quality testing and public input, last January state offi cials moved to protect one of the state’s last unspoiled waters, the North Fork First Broad River, from development. Environment North Carolina celebrated the decision as an important victory for clean water.

Nestled in northeast Rutherford County, the North Fork First Broad River and the surrounding South Mountain Game Lands are home to dozens of species of rare wildlife. Its waters are in pristine condition, harboring native crayfi sh and brook trout, despite encroaching development nearby.

Environment North Carolina partnered with the Concerned Citizens of Rutherford County to petition state offi cials to give the river an “Outstanding Resource Water” classifi cation. The

Jordan Lake and iconic rivers to see more protection

Jordan Lake.

Environment North Carolina

Page 6

designation will limit future pollution discharges into a portion of the river and its tributaries, and require vegetative buffers to fi lter pollutants.

Offi cials are expected to address similar petitions from Environment North Carolina and the Pisgah Group of the Sierra Club to protect Horsepasture River in the coming months. Environment North Carolina also has similar appeals pending for the Eno River and the Lower Tar River.

Jordan Lake protection nearsState offi cials are poised to adopt an Environment North Carolina-backed plan for the cleanup and protection of Jordan Lake—the Triangle reservoir that draws more than 1 million visitors every year and provides drinking water to more than 100,000 residents.

Scientists fi rst identifi ed pollution problems in Jordan Lake in 1997, causing state leaders to demand cleanup and protection of the reservoir. But since then, pollution problems have gotten worse. In fact, since 2000, more than 60 new developments near the lake have been permitted. Runoff from this rapid growth and development threatens the lake’s ability to sustain fi shing and swimming in the years to come.

The long overdue cleanup would maintain existing vegetative buffers around the lake and its tributaries to fi lter out pollutants, and limit runoff and sewage pollution from existing and new developments. Environment North Carolina will promote the plan in 2008.

Stopping global warming

In August, Gov. Easley signed into law a measure that promotes re-newable energy and energy effi ciency as a fi rst step toward curbing global warming pollution.

Environment North Carolina protested provisions in the bill that allow utilities to pass the fi nancing costs of building new coal and nuclear power plants on to ratepayers, but lauded the legislation’s clean en-ergy targets. The clean energy standard was championed by Reps. Pricey Harrison (Guilford) and Grier Martin (Wake), and and Sens. Janet Cowell (Wake) and Charlie Albertson (Duplin).

The bill ensures that 7.5 percent of the state’s energy will come from clean sources by 2021, and requires regulators to evaluate renew-able sources and energy conservation measures before permitting new coal or nuclear plants. Studies estimate the clean energy stan-dard could cut global warming pollution by over 13 million tons each year versus projected levels.

Bill to cut 13 million tons of global warming pollution passed

Environment North Carolina

Rep. Pricey Harrison and Environment North Carolina’s Margaret Hartzell at the release of the “Carbon Boom.” Clean energy sources, like this solar panel at Kitty Hawk, can help North Carolina cut global warming pollution.

Page 8

The News and Observer—August 31, 2007Wade Rawlins, Staff Writer

Global warming will mean more years like North Carolina’s warmer-than-average 2006, an environmental advocacy group said Thursday.

Environment North Carolina examined temperature patterns and found that Raleigh, Greensboro and Asheville all experienced maximum temperatures in 2006 of 2 degrees or more above average.

“Throw out the record books, because global warming is raising temperatures in North Carolina and across the country,” said Margaret Hartzell, fi eld organizer for Environment North Carolina. The group examined data from 2000 to 2006 and compared them with average temperatures over a 30-year period from 1971 to 2000.

The fi ndings add to recent conclusions that global warming is affecting natural weather variation, but scientists caution it’s too early to blame global warming on this year’s string of blazing hot August days in North Carolina.

In February, an international panel of scientists concluded that the evidence of global warming is “unequivocal” and that much of the temperature change in the past 50 years has likely been caused by human activities such as burning coal and oil. Those activities raised the levels of heat-trapping carbon dioxide gases in the atmosphere, creating the greenhouse effect.

The average global temperature increased about 1 degree between 1900 and 2000, and the rate of warming has accelerated over the past 30 years.

In the news“Long-term forecast: Hotter and hotter”

Environment North Carolina SupportersCitizen support is the cornerstone of Environment North Carolina and the Environment North Carolina Research & Policy Center. Thousands of North Carolina citizens supported Environment North Carolina by making mem-bership contributions in fiscal year 2007. The members listed below were particularly generous in backing the organization’s research and advocacy. Names that appear in italics denote Monthly Supporters. These members provide stability to the organization’s resources through our monthly giving program.

Development Committee—contributed $600 or more.Nicholas Bogen • James Eakes • Julia Love • David Mitchell • Douglas H. Phelps • Katherine Shea • Jackie Wilson

Patrons—contributed between $300 and $599.Evan Ashkin • Michael Broadwater • Michael Cunningham • Dean Debnam • Cydne E. Flax • Christopher Garwacki • Laura Hanson • Anne Hill • Tempe Lampe • Irene Lofstrom • Ariana Mangum • Paul Meder • Nathan Moret • Elizabeth Nor-man • Robert Peele • Rebecca Pitts • Daniel Popham • Todd Slapley-Quinn • Rodger Strother

Sponsors—contributed between $200 and $299.Keith & Karen Aldridge • Diane Allen • Susheel Atree • Ann Bass • M. Carroll • Ben Chapman • Karen Christie • Anne Clayborne • Christina Clyburn • David Cole • Richard Cook • Sara Cooper • Bill Cox • Brian Creech • Susana Dancy • Susan Daniel • Joseph Donahue and Priscilla Wald • Gloria Dragonette • Irene Dwin-nell • Suzanne Eismann • William Ewald • M. Dakota Forgione • Jessica Frucht • Scott Fullagar • Brent Galloway • Christopher Garwacki • William R. Gillespie • Wendy Gressett • Sevi Gunal • Erin Guthrie • Pia Hagnas • Gloria Harbin • Nancy Harper • Ana Hart • Homme Hellinga • Pamela Hemminger • Tifani Hencke • Lori Hensley • Joseph Herzenberg • Kyle Highsmith • Michael Hill • Richard J. Hoover • Dwayne Huebner • Samuel Hummel • Verla Insko • Gary Johnston • Eric Jones • Georgina Jones • Elise Koegel • Steve Kottong • Daniel Lafaro • David Lands • John Langstaff • Linda Levin • Jeffrey Liebach • Stephen Lutz • Shannon Martin • Nancy M. Mattox • Jennifer Mayo • Marie McDaniel • Bret McDermitt • Beth McKee-Huger • Margaret Michel • Kevan Miller • Michael Monk • Molly Moore • Samuel Moore • Deborah Nolan • Dave Perrey • Eric Pluer • Teresa Porter • Diane Race • William Ransdell • Robert Ray • Ann Reaves • Mike Rouse • E.

Environment North Carolina

Financial InformationCharts reflect combined financial information for the environmental work con-ducted by Environment North Carolina, the Environment North Carolina Research & Policy Center and Environment North Carolina’s citizen outreach programs.

Rusnak • Judith Sanford • David Sawin • Grant Scott • John Steinbaugh • Heather Stephenson • Amy Ursano • Pam Van Dyk • Dianne Vetter • Jennifer Wainwright • Christianna Williams • Stephanie Winfield

Foundation supportThe Environment North Carolina Research & Policy Center is a 501(c)(3) organization, and conducts research and public education on emerging environmental issues. Contributions to the Environment North Carolina Re-search & Policy Center are tax-deductible. To find out more, contact Eliza-beth Ouzts, (919) 833-0015.

The Environment North Carolina Research & Policy Center would like to thank Fred and Alice Stanback and the following foundations for support-ing our work in fiscal year 2007: Beldon Fund • Educational Foundation of America • Energy Foundation • Julian Price Family Foundation • Z. Smith Reynolds Foundation

Foundation Grants 51% Citizen Contributions 49%

FY07 Income

Program 87% Fundraising 9% Administrative 4%

FY07 Expenses FY07 Programs

Sponsors—continued.

Page 10

Preservation 38% Global Warming & Clean Energy 30% Clean Water 29% Clean Air & Other 3%

Photo CreditsCover: Jill Lang*; P. (From top left) 1: Ception**; P. 2 Ception**, Getty Images, IndexStock; P. 3: Ception**, Danielle Brigida**; P 4: Ception**; P. 5: Iofoto*, Mark Pilgrim**; P. 7: Glen Jones*, staff, Jimmy Joe**; P. 9: Shutterstock; Back: Mary Terriberry*. *: Shutterstock.com, **: Creative Commons.

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