The California Air Resources Board last week released a discussion draft that includes additional details of the cap-and-trade and the mandatory reporting regulations. The draft proposals responded to direction from the board and cover a range of program elements that incorporate allowances, market oversight, enforcement and offsets.
The additional details will be discussed at a workshop on July 15. Later in the summer, there will be a formal public comment and review period. Specific elements of the discussion draft include:
• Initiation of the program elements in 2012, but extending the start of the compliance obligation to 2013;
• Establishing precise benchmarks for the allocation of carbon allowances over the life of the program;
• Details regarding allocation for both public and investor-owned utilities;
• Changes to the timing of auctions;
• Clarification of penalty provisions as part of a broader process to ensure strong enforcement and market oversight;
• Clarification of the quantity of allowances a market participant will be allowed to hold;
• Changes to language to ensure reductions in greenhouse gases from the electricity sector;
• Provision to support the continued benefits of voluntary investment in renewable energy sources, consistent with the state’s efforts to drive continued growth in renewable energy; and
• Clarification of offset program details, continuing the stringency of ‘compliance-grade’ offsets.
The drafts and workshop information can be found at www.arb.ca.gov/cc/capandtrade/capandtrade.htm. The discussion draft for the mandatory reporting regulation is at www.arb.ca.gov/cc/reporting/ghg-rep/ghg-rep.htm.