•
•
•
Created in June 1999, the first business group devoted to pricing and trading GHG reductions
HQ in Geneva, Offices in Brussels, Toronto, Washington, DC, San Francisco and Seoul
160 members, including leading international companies from across the carbon trading cycle:
o
•
oil, electricity, cement, aluminum, chemical, paper, and banking, data verification and certification,
brokering and trading, legal, and consulting industries
IETA is dedicated to:
o
o
o
The objectives of the United Nations Framework Convention on Climate Change (UNFCCC) and
ultimately climate protection;
The establishment of effective market-based trading systems for greenhouse gas emissions by
businesses that are demonstrably fair, open, efficient, accountable and consistent across national
boundaries; and
Maintaining societal equity and environmental integrity while establishing these systems.
•
•
•
•
•
California’s Global Warming Solutions Act (AB 32) passes in 2006, requiring emissions to decrease
to 1990 levels by 2020, a 25% reduction statewide
AB 32 designates the California Air Resources Board (ARB) to develop reduction regulations and
design the emissions trading market
CARB passed preliminary draft regulations December 17, 2010, CARB to finalize rules 2011
Market start date is currently set for January 1, 2012
First year is a “stress test” of the system with full compliance to begin in 2013
o ARB Agenda for Board Hearing will be posted on 10 October 2011
o ARB Board Hearing in Sacramento on 20-21 October 2011
o ARB to submit final regulations to California’s State Office of Administrative Law on 27
October 2011
o Passage of final regulations must occur by 28 October 2011
•
•
•
•
Compliance Period: 3-year
Who is Covered: Only electricity and industrial sources initially, phasing in fuel distributors in
2015
Allocation: “slow start” approach, significant free allocation moving to greater auction
volumes over time
Auction:
o
•
Price Containment Reserve:
o
o
•
•
•
1st compliance period, $10/t floor price and $40/t soft ceiling price
Contains 4% total allowances issued
One third of reserve available for purchase at three set prices: $40, $45, $50
Banking: unlimited banking subject to holding requirements,
Borrowing: not permitted (unless to pay the penalty for non-compliance)
Offsets: entities can use up to 8% of their compliance obligation with offsets
o
Currently accepting offsets from four project types: livestock; urban forestry; Ozone Depleting
Substance Destruction; and forestry
•AIR vs ARB case
o Association of Irritated Residents (AIR) sued ARB for violating the California
Environmental Quality Act by failing to complete a sufficient analysis of the
environmental impacts of alternatives to the C/T system
o ARB released additional Scoping Plan and case has since been dismissed
o More legal challenges to come?
•Lots of work to do
o Buyer liability issue still needs to be addressed
o To date, California’s ARB has identified four other offset project types.
o Three additional candidate project types under consideration: Pneumatic Valve Protocol
(ACR); reduction of methane and other GHGs from rice cultivation and harvesting
(protocol under review at multiple carbon registries); and reduction of nitrous oxide
emissions by decreasing nitrogen-based fertilizers (ACR).
•
•
•
Can California meet its emissions reductions goals in time?
California is the lynch pin to the Western Climate Initiative (California, Quebec, British
Columbia).
Can the California C/T program be successfully linked to other regional C/T programs?
•
•
Other National Programs?
Will California be a model for a US federal C/T program?
•
•
•
On 14 July, the WCI released draft protocol development
and adoption process that can be followed by Partner
Jurisdictions to incorporate into provincial/state rules and
regulations.
WCI’s draft protocol process provides a “step-by-step
description of how WCI partners will review existing
protocols in regard to how they meet WCI offset criteria”.
Stakeholders had until 19 August 2011 to submit
comments on the proposed process.
•
•
•
•
Regional Greenhouse Gas Initiative (RGGI) is a regional GHG cap & trade program between
10 Northeastern states to reduce emissions from the power sector 10 percent by 2018
•
- Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New
Jersey, New York, Rhode Island and Vermont.
First mandatory market-based effort in the US to reduce GHG emissions launched in 2009.
Full Auction, with revenue channeled into RE/EE
RGGI Offsets limited to 5 eligible project types, but price triggers in effect
•
•
•
•
•
•
Governor Christie has moved to pull New Jersey out of the program though he faces
challenges from the State Legislature.
Maine Governor Paul LePage wanted out, but seems to have given up
A 2011-2012 scheduled review process has begun with a stakeholder meeting on September
19th. Big question - how much will the cap be reduced?
Fall 2011: Review program successes, identify & model potential policy scenarios
Winter 2012: Late-January stakeholder meeting(s) to receive stakeholder comments on the
policy scenario runs, the assumptions for macroeconomic modeling as well as other
elements of the program success, program impacts, program operations, additional
reductions, imports and emissions leakage, and offsets.
Spring 2012: Present the comprehensive set of recommendations to stakeholders with
potential changes to the RGGI program during the second control period (2012-2014).
•
Early rulemaking for ground level ozone has been suspended
•
•
scheduled 2013 review is still expected
New Source Performance Standards under the EPA Clean Air Act
•
Can flexible mechanisms be established under the 111d rules?
Potential for regional programs to qualify for equivalency?
Release of Power Sector NSPS Draft Rules Delayed to 30 September 2011
•
Forget MACT – go for MAJOR
•
It’s the jobs, stupid.
•
•
Contact:
Henry Derwent
derwent@ieta.org