Offset Integrity Already Debated in California

Peter Weisberg, The Climate Trust
Weekly Policy and Finance Update – June 19, 2017

Offset integrity already debated in California.

After two bills in the California legislature to extend the cap and trade system failed to pass with simple majorities, the pressure is on for California to find a two-thirds supermajority to extend its carbon price past 2020. Cost containment continues to be at the center of this debate, especially after the legislature passed an increase in gas taxes to pay for road maintenance earlier this year. This search for cost containment has re-raised questions already settled about the integrity of California Carbon Offsets (CCOs) and their additionality. We therefore wanted to re-live some of that history here.

AB32 required the California Air Resources Board (ARB) to ensure all emission reductions recognized by the state as CCOs to be real, permanent, quantifiable, verifiable and enforceable. The cap and trade regulation crafted by ARB to meet the goals of AB32 recognized that offsets must be “additional” to meet these criteria. ARB’s approach to additionality was vetted in rulemaking, a process that included substantial stakeholder input from across the spectrum.

The courts debated and settled the questions raised about the additionality of CCOs several years ago. In March 2012, the Citizens Climate Lobby filed a lawsuit alleging that ARB failed to ensure that offset reductions are real and additional. In January 2013 the San Francisco Superior Court ruled that ARB had “used its experience, expertise, and judgement in arriving at the appropriate methodology to determine additionality… based on extensive research, stakeholder input, public input and fact-based analysis.” This decision was subsequently upheld by the Court of Appeal, which the CA Supreme Court let stand.

In short, while these issues are nuanced and complex, they have been considered and thoroughly tested. There is no compelling case that the legislature, ARB, and the courts all got it wrong before. At this point, with the extension of cap and trade hanging in the balance of the ability to contain carbon costs, the additionality of CCOs does not need to be re-debated.