Carbon March Tempo Quickens: California Cap-N-Trade Plans Announced

 

The photo by Mick Montara is not a sci-fi special effect. Its the sun seen through the thick wildfire haze in mid-daytime here in NoCal yesterday. No kidding! The haze blanketing many cities comes from over 100 wildfires that we are having here in California.

And a day of severely reduced air quality is also an ominous backdrop for yesterday’s announcement of a proposed carbon cap-and-trade program by the California Air Resources Board (CARB). It’s not a done deal yet, but for the first time, we are all getting a peek at California’s announced implementation plans for the famed AB 32 greenhouse gas reduction legislation.

The Plan
Over multiple coffees, I’ve perused several stories plus an in depth legal analysis of the plan (only received via email; will send subscribers a copy if you email me). The basic gist for commercial property owners is this:

• Excessive emissions will cost you: Businesses which exceed their emissions allowances will have to buy those emissions on the open carbon market. Over the years as the caps are reduced to achieve compliance with set targets, businesses purchasing emissions credits may have to pay more. That’s the state’s vision.

• Property is high on the state’s hit list: Buildings and appliances combined rank #2, behind auto fuel efficiency, in targeted emissions reductions. Total reductions of 26 million metric tons of CO₂, or 15% of total 169 million metric tons of targeted reductions are expected by 2020. All of that is to be achieved by property owners increasing the energy efficiency of their buildings and appliances as well as a new vehicle miles traveled-angle: new housing developments being located so that driving commute times are reduced. Wow. Oh, and more efficient use of water will reduce  emissions by 5 million metric tons CO₂per year.

• But there’s a financial opportunity for emissions outperformers: Businesses which successfully reduce their CO₂ emissions below what is required will be able to sell credits back to the open market. Of course, it’ll be awhile before we all know what that’s really worth.

• And cap and trade strengthens renewable energy: These measures also push expansion of renewable energy markets as a source of clean energy. If you’ve been following the latest kidney punch to the solar industry by the Bureau of Land Management, you’ll agree that this plan starts to position clean energy well during a time when they are not getting any respect from the federal government.

Don’t like it? Well, here’s CARB’s “we mean business” quip:

“If the combination of existing rules and new cap-and-trade regulation fall short of the goal, the state could impose a carbon tax.” said Mary Nichols, chairwoman of the California Air Resources Board. “We look at this (carbon tax) as a back stop”.

Fossil-fuel Spinial
Of course, Big Oil is not relaxed about this at all. CARB has tagged them to reduce, by their own estimates, 60 million metric tons of emissions, or 35% of total targeted reductions. Predictably, they’ve gone on the spinial (spin and denial) offensive with a transparent barrage of FUD (fear, uncertainty and doubt):

“What the air resources board is finding out is that this is extremely complicated. I’m not surprised that we only have a road map, with the details to be filled in later, said Cathy Reis-Boyd, COO of the Western States Petroleum Association…She also said that fuel prices could rise even higher if the plan is not implemented in a way that ensures that refineries can buy credits when they need them.”

Anywho, the cap and trade plan is still subject to public comment and has many features which remain to be worked out. So prepare for more updates here down the road.

It is significant for the Green Journey because it provides a compelling backdrop for green building. In California, it is no longer just the right thing to do; regulators are now in the midst of restructuring away a percentage of your profits if you don’t start now.

Last note: If you want a copy of the legal analysis I received for your own review — and you’re a subscriber — please email me and request a copy.