AB 32 and Offset Basics


To keep you updated on exciting developments in California’s groundbreaking Cap-and-Trade Program, this final Alert in a three-part series focuses on yet another important element of the carbon trading system: Offsets. Offsets could significantly impact a company’s ability to comply with the new program, due to begin on January 1, 2013. Additionally, rules governing offsets will likely shape compliance strategies. Our previous two Alerts in this series explained the fundamental features of the California Cap-and-Trade Program and the rules of the soon-to-be-launched auction system. To further understand cap and trade in California, this Alert will discuss the basic elements of the offset program and how offset credits will work in the cap-and-trade system.

Offsets will help regulated entities reduce the potentially enormous cost of complying with the California Cap-and-Trade Program. As intended by the California Air Resources Board (ARB), entities subject to limits on greenhouse gas (GHG) emissions may cushion the transition to expensive emission-reducing technologies by purchasing offset credits through the Compliance Offset Program.

Please see full Alert below for further information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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