The time has finally come… California’s cap-and-trade regulation finally went into effect in January of 2012 (not without its litigation drama along the way – see here, here, here, here, and here for the full saga). The crowning jewel of California’s AB 32, the regulation establishes an overall cap on greenhouse gas (GHG) emissions for all covered sources. There are two “compliance instruments” contemplated as a part of the cap-and-trade regulation. In other words, there are two different items that a covered facility may obtain to allow them to emit GHGs: (i) allowances, which are a particular facility’s tradable portion of the total GHGs permitted to be emitted under the overall cap, and (ii) offsets, which are projects that will reduce emissions outside of the cap. This article will focus on the regulation’s offset program which is run by the California Air Resources Board (ARB).
Under the regulation, offsets may be used by a facility to meet up to 8% of its compliance obligation under the cap-and-trade program. Not just any old GHG-reducing project warrants the issuance of an official offset, however… there are many requirements. The reductions created by the project must be real, additional (meaning, beyond regulation or would otherwise occur), quantifiable, permanent, verifiable and enforceable.
Please see full publication below for more information.
