• Who We Are
    • The Climate Trust
    • Climate Trust Capital
    • Achievements
    • Leadership And Board Of Directors
  • What We Do
    • Action
    • Impact
    • Case Studies
  • Financials
  • Media
    • Blog
    • News & Press
The Climate Trust | California Signals Long-Term Demand for Offsets

California Signals Long-Term Demand for Offsets

Biogas, California Market, Forestry, Policy, Scorcher

Peter Weisberg, The Climate Trust
Weekly Policy and Finance Update – March 12, 2018

THE BOTTOM LINE.

In a bullish signal for long-term demand for offsets, the California Air Resources Board has proposed a broad interpretation of what projects will qualify as having direct environmental benefits to California.

With the passage of AB 398, an extension of California’s cap and trade program through 2030, and its preference for offset projects with “direct environmental benefits” to the state, long-term demand for offset projects outside of California has been called into question. Without resolving this uncertainty, the preliminary discussion draft released by the CA Air Resources Board (ARB) for its March 2nd workshop, sends a bullish signal to these projects that ARB could follow a broad interpretation of what qualifies as providing a direct environmental benefit. This strategy could potentially avoid a constitutional challenge that this requirement violates the commerce clause and also enable offsets to play a larger role in containing costs in California’s cap and trade system.

Under ARB’s “potential staff proposal” for establishing direct environmental benefits, projects that can show air pollutant reductions in California will automatically be considered to have direct environmental benefits. In the interpretation of many, ozone depleting substances projects that remove refrigerants from California are likely to have a very strong case to make that they avoid air pollutant emissions in California, even if the material is destroyed outside of the state. In addition, projects in watersheds that flow into California that reduce or avoid any pollutant that could have an adverse impact on state waters are proposed to have direct environmental benefits. Forestry and digester projects, which have significant water quality benefits in watersheds throughout the West and that eventually flow into California, may also be included as direct environmental benefit projects.

Most broadly of all, however, is the definition of direct environmental benefit in AB 398, which includes “the reduction or avoidance of any pollutant that could have an adverse impact on the waters of the state.” Climate modeling is very clear that greenhouse gas emissions anywhere have an adverse impact on California’s waters. High greenhouse gas emissions scenarios will worsen California’s snowpack loss, saltwater intrusion into the Sacramento-San Joaquin Delta due to sea level rise, sediment and contaminants in surface waters due to increased wildfire and flash flooding, overloaded sewer systems due to heavier precipitation events, and on and on.

While ARB’s proposal does not make it clear that it will accept this argument that greenhouse gas emissions anywhere “could have an adverse impact on the waters” of California, the door has been opened for that argument. How that is aligned with both the legislative intent behind AB 398 and the potential threat of a commerce clause violation still needs to unfold. Until then, unfortunately, uncertainty will remain as to how large the demand is for offset projects outside of California.


Research and Resources

Preliminary discussion draft of potential changes to the regulation for the California cap
California Air Resources Board, February 2018

Emissions pathways, climate change and impacts on California
Hayhoe et al., National Academy of Sciences, August 2004

Central Valley Region Climate Change Work Plan
California Water Boards, December 2017


Nothing But Clear Skies Blog

North American Demand for Offsets Analysis 
Peter Weisberg, Ecosystem Marketplace, Oct 27, 2017

Recent Scorcher

Every passing year the cost of curtailing carbon emissions rises Sean Penrith, Mar 5, 2018
Oregon Cap and Trade Could Make Industry More Competitive Sheldon Zakreski, Feb 26, 2018
In-State Offsets Preference for Oregon Could Raise Issues of Legality Peter Weisberg, Feb 20, 2018

Image credit: Flickr/Mark Jensen

Tags
Adaptation
Aggregation
American Carbon Registry
Biochar
Blue Carbon
C-AGG
California Air Resources Board
California Carbon Info
Cap and Invest
carbon offset standards
Carbon Pricing
Carbon-Pulse
Clean Power Plan
Climate Action Reserve
Climate Bonds
Conservation Finance Network
Corporate Social Responsibility
CORSIA
Culture
Dairy Digester
Ecosystem Marketplace
Edible Portland
Energy Central
Environmental Defense Fund
Environmental Justice
EPAF
Farm Power Northwest
GreenBiz
IPCC
Job Announcement
Leadership
Low Carbon Fuel Standard
Milestone
Oregon Carbon Dioxide Standard
Oregon Clean Fuels Program
Oregon Energy Facility Siting Council
Oregon Global Warming Commission
Pacific Coast Action Plan on Climate and Energy
Paris
Portland General Electric
REDD
Renewable Fuel Standard
Renewable Identification Numbers
Request For Proposal
RGGI
Rice
Risk Management
Scientific American
Social Cost of Carbon
Supply Chain
Sustainable Business Oregon
Triple Pundit
USDA Natural Resources Conservation Service
Verified Carbon Standard
Western Climate Initiative
Recent Comments
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
Proud Member Partners in Diversity
  • DONATE
  • CAREERS
  • CONTACT

©2020 The Climate Trust. Crafted by ILLUSIO