The California Air Resources Board (CARB) has released the Preliminary Draft Cap-And-Trade Regulation and announced a December 14, 2009 Public meeting to discuss the Preliminary Draft Regulation.

In December 2008, CARB adopted the AB 32 Scoping Plan. The Plan incorporates a range of measures to reduce greenhouse gas (GHG) emissions in California, including the creation of a cap-and-trade program. As proposed, the California cap-and-trade program would include a stringent declining emissions cap. Emissions trading and the limited use of offsets would provide flexibility for covered entities to comply. If adopted, the cap-and-trade program would allow trading to ensure cost-effective emissions reductions and cover 85 percent of California’s GHG emissions.

CARB has issued the PDR in the hope to garner public comment and support.  To further its effort, CARB has scheduled a public meeting on Monday, December 14, 2009, from 1:00 pm to 5:00 pm at the Byron Sher Auditorium, 2nd Floor, at Cal/EPA Headquarters Building, 1001 I Street, Sacramento, California 95814.  In addition, CARB has inserted narrative into the PDR to highlight certain issues on which it is  specifically seeking comment.  For example, Section 95820 discusses “Covered Entities” the PDR “provides background on why the proposed covered entities were selected.” Along with the PDR, CARB issued an Excel spreadsheet entitled “Example Base Allowance Budgets for the California Cap-and-Trade Program” to provide example cap numbers.

There are five fundamental parts to the PDR:

  1. The Cap. The cap on emissions is set for each compliance period, first of which will begin January 1, 2012.  CARB is proposing to have three year compliance periods, with the possibility of staggering the phase-in of the program.
  2. Allowances.  Permits to emit GHG are “allowances.”  Every year the cap would decline and thus, the number od allwances issued would decline. At the end of a compliance period each covered entity would surrender allowances and any needed offsets that would equal its total GHG emissions during the compliance period.  Entities may do the following with their allowances: (1) surrender to to comply; (2) bank them for for future use; (3) trade them; (4) ask CARB to retire them.
  3. Banking. Refers to the ability to carry-over unused allowances or offsets from one compliance period to another.  Provides incentive for covered entities to make early reductions.
  4. Offsets.  Covered entities could buy offset credits in lieu of buying allowances or reducing their emissions on-site.  Offsets are tradeable credits that represent GHG emissions reductions that are made in areas or sectors not covered by the cap-and-trade program.
  5. Linkage to Other Greenhouse Gas Emissions Trading and Offset Crediting Systems.  The PDR proposes to link its cap-and-trade program to other trading systems.

At least initially, the program will be limited to large sources that emit 25,00 metric tons or more of GHG a year.  The list of covered entities proposed by CARB contains the usual suspects:  Electricity deliverers, transportation fuel deliverers, and facilities with the following operations or processes.

  • Stationary combustion;
  • Cement manufacturing;
  • Cogeneration;
  • Petroleum refining;
  • Hydrogen production;
  • Aluminum production;
  • Facility operators calcining carbonates;
  • CO2 supplier or transfer recipient;
  • Electricity generation;
  • Glass production;
  • Iron and steel production;
  • Lime production;
  • Natural gas transmission and distribution;
  • Nitric acid production;
  • Oil extraction field operation;
  • Gas extraction field operation;
  • Production of industrial gases;
  • Pulp and paper production; and
  • Soda ash production.

CARB states in its Notice that “while staff has specifically highlighted a number of areas for public comment, we welcome and will consider comments on all portions of the draft for the Spring 2010
proposed draft regulation.”  Comments are due no later than January 11, 2010 and can be submitted at: http://www.arb.ca.gov/lispub/comm2/bcsubform.php?listname=dec-14-pdrws&comm_period=1.

As part of the California Air Resources Board’s (CARB) “Climate Change Proposed Scoping Plan,” the Board, on October 24, 2008, released its Preliminary Draft Staff Proposal on recommended approaches for setting Interim significance thresholds for greenhouse gases under the California Environmental Quality Act (CEQA).  Since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

California law provides that climate change is an environmental effect subject to the CEQA.  Lead agencies, such as Airport Land Use Commissions, are therefore obligated to determine whether a project’s climate change-related effects may be significant, thereby requiring preparation of an Environmental Impact Report and to impose feasible mitigation to substantially lessen any significant effects.

CARB is specifically requesting participation from the public stakeholders and local lead agencies.  The Preliminary Draft Staff Proposal suggests a “sector approach” due to the fact that “(1) some sectors contribute more substantially to the problem, and therefore should have a greater obligation for emissions reductions, and (2) looking forward, there are differing levels of emissions reductions expected from different sectors in or to meet California’s climate objectives.”

The PDSP includes flowcharts that address CARB’s “threshold concepts” for industrial projects and for residential and commercial projects.  The PDSP also states that that the staff is working on a proposal for an interim approach for thresholds for transportation projects.  CARB proposes, for example, a significance threshold of 7,000 metric tons of CO2e/year.  For Projects that go over that amount, an EIR would have to be prepared and “all feasible GHG mitigation measures implemented.”

CARB has identified a few questions to solicit public comment, but notes that the “list is not exhaustive.”

  • Will the recommended approaches have any unintended consequences, for example, encouraging the piecemealing of projects?
  • As set out in the attachments to the Staff Proposal, staff proposes to define certain performance standards (e.g., for energy efficiency) by referencing or compiling lists from existing local, State or national standards.  For some sub-sources of GHG emissions (e.g., construction, transportation, waste), ARB staff has not identified reference standards.  How should the performance standards for these sub-sources be defined?
  • Are any of the industrial, residential, or commercial project types eligible for categorical exemptions likely to contribute more significantly to climate change than staff’s preliminary analysis indicates?
  • For residential and commercial projects, staff has proposed that the GHG emissions of some projects that meet GHG performance standards might under some circumstances still be considered cumulatively considerable and therefore significant.  What types of projects might still have climate change-related impacts?

As noted above, since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

As part of the California Air Resources Board’s (CARB) “Climate Change Proposed Scoping Plan,” the Board, on October 24, 2008, released its Preliminary Draft Staff Proposal on recommended approaches for setting Interim significance thresholds for greenhouse gases under the California Environmental Quality Act (CEQA).  Since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

California law provides that climate change is an environmental effect subject to the CEQA.  Lead agencies, such as Airport Land Use Commissions, are therefore obligated to determine whether a project’s climate change-related effects may be significant, thereby requiring preparation of an Environmental Impact Report and to impose feasible mitigation to substantially lessen any significant effects.

CARB is specifically requesting participation from the public stakeholders and local lead agencies.  The Preliminary Draft Staff Proposal suggests a “sector approach” due to the fact that “(1) some sectors contribute more substantially to the problem, and therefore should have a greater obligation for emissions reductions, and (2) looking forward, there are differing levels of emissions reductions expected from different sectors in or to meet California’s climate objectives.”

The PDSP includes flowcharts that address CARB’s “threshold concepts” for industrial projects and for residential and commercial projects.  The PDSP also states that that the staff is working on a proposal for an interim approach for thresholds for transportation projects.  CARB proposes, for example, a significance threshold of 7,000 metric tons of CO2e/year.  For Projects that go over that amount, an EIR would have to be prepared and “all feasible GHG mitigation measures implemented.”

CARB has identified a few questions to solicit public comment, but notes that the “list is not exhaustive.”

  • Will the recommended approaches have any unintended consequences, for example, encouraging the piecemealing of projects?
  • As set out in the attachments to the Staff Proposal, staff proposes to define certain performance standards (e.g., for energy efficiency) by referencing or compiling lists from existing local, State or national standards.  For some sub-sources of GHG emissions (e.g., construction, transportation, waste), ARB staff has not identified reference standards.  How should the performance standards for these sub-sources be defined?
  • Are any of the industrial, residential, or commercial project types eligible for categorical exemptions likely to contribute more significantly to climate change than staff’s preliminary analysis indicates?
  • For residential and commercial projects, staff has proposed that the GHG emissions of some projects that meet GHG performance standards might under some circumstances still be considered cumulatively considerable and therefore significant.  What types of projects might still have climate change-related impacts?

As noted above, since these thresholds of significance will affect the conduct of EIRs for projects subject to CEQA, such as airport development projects and Airport Land Use Compatibility Plans, participation in the setting of these standards is critical.

The Global Warming Solutions Act of 2006 (AB 32) designated the California Air Resources Board (CARB) as the lead agency for  its implementation.  The next milestone for CARB is developing a Scoping Plan outlining California’s strategy to achieve the 2020 greenhouse gas (GHG) emissions limit.  So on October 15, 2008, CARB published its Climate Change Proposed Scoping Plan:  A Framework for Change. The Scoping Plan contains the main strategies California will use to reduce the greenhouse gases that cause climate change. Since this plan has the potential to affect just about every sector of California, CARB is seeking the public’s comments.  Comments on the Scoping Plan are due no later than December 10, 2008. The Scoping Plan will be presented for approval at the CARB’s December 11, 2008, meeting

The Scoping Plan proposes a comprehensive set of actions designed to reduce overall greenhouse gas emissions in California.  Among the solutions it proposes are “improving our state’s infrastructure, transitioning to cleaner and more secure sources of energy, and adopting 21st century land use planning and development practices.”  Moreover, CARB lists as the key elements of its recommendations:

  • Establishing targets for transportation-related greenhouse gas emissions for regions throughout California, and pursuing policies and incentives to achieve those targets;
  • Developing a California cap-and-trade program that links with other Western Climate Initiative partner programs to create a regional market system; including California’s clean car standards, goods and movement measures, and the Low Carbon Fuel Standard;
  • Adopting and implementing measures pursuant to existing State laws and policies,
  • Expanding and strengthening existing energy efficiency programs as well as building and appliance standards;
  • Achieving a statewide renewables energy mix of 33 percent; and
  • Creating targeted fees, including a public goods charge on water use, fees on high global warming potential gases, and a fee to fund the administrative costs of the State’s long term commitment to AB 32 implementation.

Noticeably absent from the Scoping Plan is any mention of airports or aircraft.  This is due to the CARB’s perceived inability  to do much about airports and aircraft due to FAA’s pre-empting the field.  Indeed, about the only mention of airports and aircraft in the AB 32 materials comes in Appendix C of the Draft Scoping Plan:

Emissions from the fuel used in planes is an important consideration, however, the State does not have regulatory authority over aviation. ARB has not identified aviation specific measures; however, successful deployment of High Speed Rail could divert some air passengers to rail.

Draft Proposed Scoping Plan, Appendix C, p. C-21.  Nor does the Scoping Plan take the emissions of aircraft have while they are in air.

As a final note, there will be a public hearing on the Scoping Plan on November 20, 2008, in Sacramento, to consider the AB 32 Scoping Plan to reduce Greenhouse Gas emissions in California.  Click here for the Agenda.