519 672 2121
Close mobile menu

California’s Air Resources Board has approved a greenhouse gas emission trading regulation.

The regulation will cover 360 businesses representing 600 facilities and is divided into two phases: an initial phase beginning in 2012 that will include all major industrial sources and utilities; and, a second phase that starts in 2015 and brings in distributors of transportation fuels, natural gas and other fuels.
By 2020, there should be a 15 percent reduction in greenhouse gas emissions compared to today, reaching the same level of emissions as the state experienced in 1990, as required under AB 32.

To ensure a gradual transition, ARB will provide significant free allowances to all industrial sources during the first phase  Companies that need additional allowances to cover their emissions can purchase them at regular quarterly auctions ARB will conduct, or buy them on the market.
Electric utilities will also be given allowances and they will be required to sell those allowances and dedicate the revenue generated for the benefit of their ratepayers and to help achieve AB 32 goals.

Eight percent of a company’s emissions can be covered using credits from compliance-grade offset projects, promoting the development of beneficial environmental projects in the forestry and agriculture sectors. Included in the regulation are four protocols, or systems of rules, covering carbon accounting rules for offset credits in forestry management, urban forestry, dairy methane digesters, and the destruction of existing banks of ozone-depleting substances in the U.S. (mostly in the form of refrigerants in older refrigeration and air-conditioning equipment).
There are also provisions to develop international offset programs that could include the preservation of international forests.  A Memorandum of Understanding has already been signed with Chiapas, Mexico, and Acre, Brazil, at the Governor’s Global Climate Summit 3 to establish these offset programs.
The regulation is designed so that California may link up with programs in other states or provinces within the Western Climate Initiative.

News & Views

Blog

The more you understand, the easier it is to manage well.

View Blog

Dazed and Confused: Five contractual considerations for uncertain times

The year 2020 will not soon be forgotten. Despite the devastation of the COVID-19 pandemic, …

Context is Everything – Miller v FSD Pharma Inc.

In the recent case of Miller v FSD Pharma, Inc.1, the Ontario Superior Court of Justice clar…