Overview of AB 32, Cap and Trade Program

Transcription

1 Overview of AB 32, Cap and Trade Program Coalition on Agricultural Greenhouse Gases Meeting March 1 st 2012 California Air Resources Board

2 AB 32: Requirements Cut GHG emissions to 1990 levels by 2020 Adopt GHG emission reporting regulation Adopt discrete early action measures Develop Scoping Plan 2

3 AB 32: Partners Collaborate with State Agency partners on the Climate Action Team Consult with advisory committees Market Advisory Committee Economic and Technology Advancement Advisory Committee Environmental Justice Advisory Committee Economic and Allocation Advisory Committee Partner with Western Climate Initiative jurisdictions to establish regional greenhouse gas programs Consider international climate change efforts 3

4 California s Agricultural GHG Inventory (2008 emissions) GHG Emissions by Activity for Agricultural Sector 14% Livestock 28% 58% Crop Growing & Harvesting General Fuel Use Source: 4

5 AB 32 Scoping Plan: Key ARB Measures Low Carbon Fuel Standard Requires a 10% reduction in carbon intensity of transportation fuels by 2020 Cap and Trade Regulation Market-based regulatory program that reduces GHG emissions through a declining limit Advanced Clean Cars Light-duty vehicles sold in 2025 will emit 75% less smog-forming pollution and 34% less GHG emissions SB 375 Integrated approach to regional transportation and land-use planning 5

6 AB 32 Scoping Plan: Other State Agency Measures (related to Ag) Bioenergy Production 33% Renewable Portfolio Standard (CEC) Bioenergy Action Plan & Alternative Fuels Investment Plan (CEC) Methane Digester Programmatic EIR (CVRWQCB) Water Conservation 20x2020 Program, The Water Conservation Act of Article 2 (DWR) Recycled Water Policy (SWRCB) 6

7 AB 32: Voluntary Measures for the Agricultural Sector Methane digesters at dairies could reduce one percent of the total statewide GHG by 2020 Aerobic composting Utilizing biomass waste as bioenergy Nitrogen management practices 7

8 Cap and Trade: Overview Market-based regulatory program, one in a suite of AB 32 measures The cap limits total GHG emissions from all regulatory sources The cap declines over time Participants are allowed to trade state-issued GHG emissions allowances Pricing GHG emissions promotes cost effective solutions 8

9 Cap and Trade: Covered Entities Stationary sources of emissions at or above 25,000 metric tons of CO 2 e per year Large industrial sources (e.g. cement, refineries, oil and natural gas producers) Electricity generation and imports Upstream coverage of small combustion emission sources (at fuel provider e.g. fuel wholesaler, or first entity to offer fuel on the market) Transportation fuels (beginning in 2015) Residential and commercial use of natural gas (beginning in 2015) 9

10 Cap and Trade: Requirements of Register with ARB Covered Entities Comply with recordkeeping, market rules, verification, and other requirements in the regulation Report GHG emissions annually (verified by a 3 rd party) Surrender allowances and offsets to match emissions at the end of each compliance period Reductions are program-wide, not facility specific 10

11 Cap and Trade: Role of Offsets Covered entities may use offsets to satisfy up to 8% of their covered emissions Sources of compliance offsets Offsets are issued directly by ARB Offsets issued by linked regulatory programs are subject to future rulemaking and stakeholder process 11

12 Cap and Trade: General Offset Criteria Reductions must meet AB 32 criteria Real, additional, quantifiable, permanent, verifiable, and enforceable Additional = beyond regulation or what would otherwise occur Offsets must result from Board-adopted compliance offset protocols Offset credits cannot be issued for GHG emission reduction activities already covered under the cap 12

13 Cap and Trade: Current ARB Compliance Offset Protocols Forestry, Urban Forestry, Ozone Depleting Substances, and Livestock Digesters Originally developed for voluntary offset market Modified by ARB for compliance offset market Future protocol development Coordinate with WCI partners Develop internally or under contract Must be approved by the Board after a stakeholder process 13

14 Cap and Trade: Offset Protocol and Reduction Opportunities for Ag Sector Staff are investigating two agricultural related offset protocols Rice straw Nitrogen-based fertilizers Evaluate other reduction opportunities from agriculture in the next Scoping Plan 14

15 Cap and Trade: Next Steps Short Term Goal: Create more opportunities for costeffective reductions region-wide, maintain CA competitiveness and reduce leakage Long Term Goal: Harmonize and link up with regional and global carbon markets 15

16 AB 32 Scoping Plan: Update 2013 Planned public kick-off meeting in Fall of 2012 Board consideration in 2013 Post-2020 planning horizon Coordinating with Climate Action Teams 16

17 Conclusion AB 32 establishes a 2020 goal for GHG emission reductions ARB s Scoping Plan describes California s plan to reduced GHG emissions Opportunities for the agricultural sector to participate in AB 32 programs 17