"Everybody talks about the weather, but nobody does anything about it" - Mark Twain
(a) What is California doing about Global Warming, and how will it affect your business?
The "California Global Warming Solutions Act of 2006" (AB32) was enacted on Sept 27, 2006 and become effective on Jan 1, 2007. Its goals quite far reaching as it attempts to establish the world's first comprehensive program of regulatory and market mechanisms for greenhouse gas (GHG) reductions.
The stated objective of AB32 is to reduce GHG emissions to 1990 levels by 2020. According to the environmental group The Natural Resources Defense Council, this reduction will result in GHG emissions "30% below forecasted levels". This goal sounds impressive. But how is this reduction to actually be achieved - and who is going to do it?
The legislation itself is quite concise. Under AB 32, the California "Air Resources Board" (ARB) is made responsible for monitoring and reducing GHGs. Simply put, it is the ARB's job to figure out how to reach this goal. Here is a link to the ARB's website on Climate Change: http://www.arb.ca.gov/cc/cc.htm
Below is a detailed analysis of the legislation, its programs, related climate change initiatives, and some "tips" for businesses to successfully adapt to these evolving rules.
(b)What's the timeline?
What guidance does AB32 give ARB? Basically, the legislation simply tells ARB when its rules have to be made, and when its final system has to be in force. The legislation itself says little about what ARB's final plan should look like, or how it will be organized.
The timeline enables ARB to develop a comprehensive set of rules and then bring them into force over the next few years while simultaneously starting work on "early actions." These "early actions" are to be developed into regulatory proposals and put into effect prior to ARB's final comprehensive GHG reduction rules being brought into force. The rationale behind these "early actions" is the recognition that some actions have to be taken immediately to reach AB32's GHG reduction goals in time. The ARB needs a few years to develop its rules, but cannot wait a few years to start enforcing GHG reductions. As will be explained, this represents an opportunity for many businesses to jump ahead of the regulators, and reap some rewards now.
The simplified timeline is that ARB will list "early actions" and develop mandatory reporting rules by 2008, put out a "scoping plan" by 2009; adopt the "early actions" by 2010; set forth the GHG limits and measures by 2011; and then make GHG limits and measures fully operative by 2012.
(Note: the "scoping plan" is the ARB's overall comprehensive program to reduce GHGs, whereas the "early actions" are particular industry-specific actions that will be brought into force prior to enforcement of the full scoping plan.)
The full detailed schedule is as follows:
By Jan 1, 2007 - ARB will establish a list of "discrete early action measures" (that can be implemented before Jan 1, 2010).
By June 30, 2007 - ARB will publish its list of early action emission reduction measures.
By Jan 1, 2008 - ARB will establish the statewide GHG emissions cap for 2020, based on 1990 emissions (beginning with sources that contribute the most GHGs).1
By Jan 1, 2008 - ARB will adopt mandatory reporting rules/regulations for "significant sources" of GHGs.
During 2009 - ARB will draft rules to implement its plan (with a series of public workshops held on each measure).
By June 2008, ARB will release a draft "scoping plan" for public review and comment.
In November 2008, the "scoping plan" will go to the Board for adoption.
By Jan 1, 2009 - ARB will formally adopt the "scoping plan" that will indicate how GHG emission reductions will be achieved by 2020.
(This Scoping Plan is expected to address "significant sources" of GHGs via direct regulations, alternative compliance mechanisms, monetary and non-monetary incentives, voluntary actions, and market-based mechanisms such as a cap and trade system.)
By Jan 1, 2010 - early action measures will take effect.
By Jan 1, 2011 - ARB will finalize regulations under the plan. (However, ARB may revise the rules post Jan 1, 2011 in furtherance of the 2020 cap.)
According to AB32, this final plan is to achieve the "maximum technologically feasible and cost-effective reductions in GHGs, including provisions for both market mechanisms and alternate compliance mechanisms."
By Jan 1, 2011, ARB may propose a "market-based declining annual aggregate emission limits" system (a.k.a. a "cap and trade" system).
By Jan 1, 2012 - ARB will begin enforcing its full set of rules (including any cap and trade system).
By Dec 31, 2020 - California will meet the deadline for achieving GHG emissions cap. (i.e.: California will emit the same amount of GHG it did back in 1990).
Tip #1: Remember that 2008 is the year in which the ARB is formulating its GHG reduction strategy. Get informed and involved now to influence the ARB's strategy, or at least be prepared to comment on the draft plan the ARB will release in June 2008, prior to its going to the Board in November 2008 for adoption.
(c) What Types of GHG emissions does AB32 cover?
AB32 specifically covers the six major GHGs, being carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydroflurocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6).2 Different GHGs have different effects on the world's climate. Some are more damaging than others. Therefore, AB 32 specifically defines a "carbon dioxide equivalent" for these other gases, being the amount of CO2 that would have produced an equivalent global warming impact as the gas in question. This definition is to be based on the best available science, specifically including data from the Intergovernmental Panel on Climate Change (IPCC).
(d) Mandatory Early Actions:
The ARB initially evaluated over 100 possible measures inclusion in the list of direct early action measures. In April 2007, three "discrete early action measures" were proposed. These were: (1) a "low carbon fuel standard;" (2) reduction of refrigerant loss from motor vehicle air conditioning maintenance; and (3) increased methane capture from landfills. An Expanded List was published in Oct 2007 increasing the three existing early actions to the present total of forty four measures (all of which are to be enforceable by Jan 1, 2010). Of these forty four measures: twenty two are in the "Transportation" sector, six are in the "Commercial" sector, three are in the "Fuels" sector, three are in the "Agriculture" sector, two are in the "Education" sector, two are in the "Cement" sector; one is in the "Forestry" sector, one is in the "Energy Efficiency" sector, one is in the "Waste" sector, one is in the "Oil and Gas" sector, one is in the "Electricity" sector, and one is in the "Fire Suppression" sector.
Six of these forty four early action measures were from stationary source high-GHG sectors. They are: (1) Insulating Foam Recovery and Destruction Program; (2) Specifications for Commercial Refrigeration; (3) High-GHG Refrigerant Tracking, Reporting and Recovery Program; (4) Residential Refrigeration; (5) Sulfur Hexafluoride Reductions from the Non-Electric Sector; and (6) Alternative Suppressants in Fire Protection Systems.
Information about each of these programs early can be found at: http://www.arb.ca.gov/cc/ccea/reports/reports.htm and more details for 9 of these programs can be found at: http://www.arb.ca.gov/cc/ccea/ccea.htm The ARB is continuously updating these programs and putting more information on the web. However, as can be seen, most of these "early actions" are very specific and target specific products, and manufacturing systems.
Tip 2: Find out if your particular business is one of the forty four now on the "early action" measure list! (You don't want to be caught by surprise since these early actions come into force a year earlier than the rest of the ARB's full GHG reduction plan).
(e) Voluntary Early Actions:
The ARB states that voluntary early actions are critical in order to achieve the legislated GHG reduction goals of AB32, and to make sure early reducers are not disadvantaged. The ARB therefore wants to encourage all businesses to start reducing their GHG emissions now. However, the fear exists that ARB's final program could penalize those same companies that have reduced their emissions before the program is put into place. Specifically, companies worry that their early reductions could simply result in a more strict baseline being applied to them in future. (For example, such as by requiring the same percentage of GHG emission reductions regardless of what reductions an individual company has already done in the past).
In addition, CARB wants to ensure that any future credits or offsets provided for voluntary early actions "are based on emission reductions that are real, permanent, quantifiable, verifiable, and enforceable".
However, until ARB's scoping plan is fully implemented, there can be no guarantee as to how these voluntary early actions will be recognized. ARB states that they will eventually determine the appropriate credit to be given for voluntary early actions and the conditions under which voluntary reductions may be used to comply with mandatory requirements.
On February 28, 2008, the ARB released a policy statement stating that it would: (1) work in partnership with the California Climate Action Registry to establish a process that will allow entities taking voluntary early actions to document those actions so that the reductions can be considered for credit against AB32 obligations; (2) work with interested parties to review proposed emission quantification methodologies; and (3) work with the South Coast Air Quality Management District and other local air districts to promote expedited development of quantification methodologies and protocols.
So what do you do now if you want to start reducing your GHG emissions (either because of a desire to be a good corporate citizen, or due to shareholder pressures, or both)? How do you ensure you are not penalized in future?
Tip 3: Try to find out a way to get future credit for your "voluntary" early emissions reductions. Do it now! The best solution to this problem is to keep detailed records of your GHG reduction programs, and keep your own "baseline" data. In future, you want to be able to say to the ARB "we reduced our GHG emissions by __% from last year, here's how we did it, and here's our energy and materials savings in dollars and pounds of paper, etc". You wont get future credit for emissions reductions unless you can show that you achieved them. Also, check for future updates and information from the California Climate Action Registry.
(f) The Scoping Plan (a.k.a. "The Big Plan to Achieve the GHG Reduction Goals"):
The ARB's final "scooping plan" is to be published in June 2008 and brought into force in January 1, 2009. This only gives businesses six months to adapt to the new GHG reduction regime, and figure out how to respond.
Tip 4: Get your own corporate GHG reduction plan developed prior to ARB's enforcement of the scoping plan! You can always modify your plan in response to ARB's finalized Scoping Plan, but at least you'll be off to a good start.
Prior to imposing and mandates or authorizing any market mechanisms, AB32 states that ARB must evaluate at least the following factors: impacts on California's economy, the environment, public health, equity between regulated entities, electricity reliability, conformance with other environmental laws, and ensure that the rules do not disproportionately impact low income communities.
Tip 5: If you are really concerned about ARB's effect on you business, start working with ARB now on the development of the Scoping Plan. The ARB is holding a series of public workshops. Attend these workshops, and show how different GHG reduction plans could affect your particular business, the economy, conflict with other laws, etc.
The development of the Scoping Plan has been organized into separate activities in each of the following "sectors": (1) Agriculture; (2) Electricity; (3) Forests; (4) High Global Warming Potential (e.g.: refrigeration, fire extinguishers, foam recovery); (5) Land Use and Local Initiatives; (6) Manufacturing; (7) Oil and Gas Refining; (8) Transportation; and (9) Waste Management and Recycling. Separate public meetings are being held for each of these different sectors.
Tip 6: Band together with others in your industry. You may want to approach "Tip 5" as a trade or industry group.
(g) Mandatory GHG Emissions Reporting - Does Your Business Have to Do It?
Mandatory emissions reporting is to begin in 2008 for all "significant sources" of GHGs. As such, many businesses will have to report their GHG emissions for up to 4 years prior to being forced to actually start reducing them (when full enforcement begins in 2012).
The ARB issued draft regulations in October 2007 regarding GHG reporting3. The draft rule was adopted in December 2007. However, this draft rule is presently under review, but the ARB expects to have completed a revised version soon "in April 2008."
The initial draft regulation would have affected more than 800 industrial and commercial sources in California. (The ARB estimates that about 850 California businesses constitute about 94% of all state GHG emissions).
Tip 7: Anyone who is a competitor of these 850 businesses should be tracking and participating in what ARB is doing - as they may be next.
Are you on the mandatory reporting list? If so, what are your reporting requirements? Businesses in the following sectors will have to provide detailed reports of their GHG emissions for sure: (1) Cement Manufacturing; (2) Electric Power Sector; (3) Cogeneration Facilities; (4) Petroleum Refineries, Hydrogen Plants, and Oil and Gas Production; and (5) Other stationary industrial sources that emit more than 25,000 Metric tones of CO2 per year. This last catch-all category is broad and will cover many industries.
Specifically, this catch all category could include water transmission, manufacturing of industrial gases, paperboard manufacturing, colleges and universities, food processing, steel foundries, mineral processing, etc. Moreover, the industries most likely to be impacted will be those that consume significant amounts of energy, being: power production, educational institutions, chemical production, landfills, manufacturers, cement production, agriculture, forestry, land use, construction, transportation, shipping, and goods transportation.
The reporting system will work in conjunction with the system already developed by the Climate Registry. The Climate Registry was formed in 2007 and is supported by a number of US and Mexican states and Canadian provinces. See: http://www.theclimateregistry.org/ It aims to standardize GHG accounting and reporting across multiple jurisdictions. Reporting Protocols were just announced in March 2008.
The first reports are due in 2009 (for 2008 emissions). No independent 3rd party verification is required for 2009 report - but some facilities (oil and gas, production, electricity production, etc.) will require 3rd party verification in 2009 (with all others requiring 3rd party verification in 2010). Verifiers are to be accredited by ARB. (Note: Entities that had voluntarily participated in the CA Climate Action Registry and had already developed a GHG reporting program prior to Dec 31, 2006 are not be required to significantly alter their reporting or verification program.)
Under the present draft rule, the reporting is facility-specific. (i.e.: you can't issue one report for all of your various business operations).
Tip 8: The emissions thresholds are based on single facility emissions only (i.e. a "stationary industrial source". Therefore, companies with multiple facilities that are separately below the threshold would not be required to report.
One question to ask is whether a large company be hit by reporting rules, while its smaller competitors won't? Alternatively, could a company split its operations into two or more facilities to avoid the reporting rules? It would appear that having many separate facilities may be a strategy to avoid the reporting rules, but you have to question whether the rules could be changed or tightened in future.
Both investor and publicly owned utilities are included in these reporting rules. However, electricity generating facilities that are solely nuclear, hydroelectric, wind or solar power are exempted. Lastly, whereas most facilities will only have to report CO2, NO and CH4, power generation facilities will also have to report SF6 and HFC gasses.
(h) Cap and Trade - What Does It Mean?
California Governor Schwarzenegger and most industry prefers a cap and trade system. Under AB32, ARB is specifically required to consider "market-based compliance measures". In 2006, California has also signed an agreement with the UK to create a carbon trading program. Therefore, it is widely expected that ARB will institute a carbon cap and trade system that will allow companies to sell carbon emission credits where they are able to achieve reductions below pre-determined emissions baselines. This trading system will likely be part of the final scoping plan.
In a cap and trade system, a company complies by: (1) reducing its emissions to the "cap" level; (2) reducing its emissions to below the "cap" level, and then selling its credits to others; or (3) failing to reduce its emissions to the "cap" level and then purchasing credits from others.
The philosophical background of a cap and trade system is that the "good guys" make money from the activities of the "bad guys". This supposedly encourages more of the "bad guys" to become "good guys". As can be appreciated, a cap and trade system can therefore be problematic when there are not enough "bad guys". This situation could occur either when the "cap" is set too high, or when the technology is available such that many "bad guys" can cheaply adopt GHG reduction systems.
Tip 9: The big winners in a cap and trade system are those companies who can effectively reduce their emissions and make money selling their emissions credits to others. The secret to doing this well is to both pin down exactly how (as cheaply as possible) to reduce your emissions - and also develop excellent recording systems showing same.
There are a number of different cap and trade systems under study that could be brought into force. Different cap and trade systems have different features. In some, the price of carbon traded may be subject to either maximum or minimum prices. In some, carbon credits can be banked for future use. In others, they cannot. In some, the use of "offsets" may be possible, in others, offsetting may not be possible, or may be restricted to certain sorts of offsets or certain locations. Note: offsetting is a system whereby a GHG emitter calculates their GHG emissions, and then purchases on "offset" of this emission from a project that traps or prevents an equivalent amount of GHG emissions. Typically, such offsets involve purchasing services that plant trees or native vegetation somewhere else in the world or protect fields from farming. Offsetting is very controversial and will likely become more controversial over time. Offsetting is also very susceptible to fraud, and the benefits are very hard to determine with clarity.
Another "wrinkle" to a cap and trade system is selecting the best point in the supply chain to be regulated. For example, should it be upstream at the point that produces or imports the fuel, or downstream at the entity that uses the fuel and emits the GHG? The point of commerce that is the best to regulate may be different for different sectors of the economy. Moreover, the best point of regulation may not be the point at which the GHGs are actually emitted. For example, commercial buildings do not lend themselves to being the best point of regulation in a cap and trade system (due to the large number of small sources of emissions). Thus, the desire to cover all sources of GHG should be balanced against the needs of an efficient regulation program.
In June 2007, ARBs' "Market Advisory Committee" recommended a cap and trade system that would: (1) incorporate all major GHG emitting sectors of the economy; (2) take a first seller approach to capping electricity emissions (i.e.: the owner or operator of a power plant, or the entity that first sells the electricity into California); (3) initially, most allowances would be allocated, but over time they would be auctioned off; (4) allow for offsets both inside and outside of California.
Governor Schwarzenegger has stated that he specifically wants ARB to avoid Europe's two biggest cap and trade problems, being: (1) lack of transparency, and (2) the lack of quantification and verification. So, if you want to get involved in lobbying for a particular type of cap and trade system, or if you want to be best prepared for whatever type of cap and trade program is brought into force, where should you start?
Tip 10:
1. Start inventorying your GHG emissions right now.
2. Start determining GHG emission reduction programs right now. (Go after the low hanging fruit first)!
3. Document both of the above in detail right now.
4. Purchasing offsets now can be risky. If you are going to do it - start with a local program (that can be monitored and verified). If you do anything before a real cap and trade system is brought in, make it as local as possible.
Tip 11: You may want to lobby for a cap and trade systems that: (1) has transparency in allocating allowances; (2) establishes a central emissions trading registry; (3) incorporates credits; (4) allows non-regulated entities to trade allowances; (5) has penalties for non-compliance; and (6) allows banking and borrowing.
The ARB is also very worried about the problem of "leakage." "Leakage" is defined as the reduction in GHG within the state that is offset by an increase in GHG emissions outside the state. For example, a company deciding to shift part of its operations out of California. (i.e.: to decrease emissions in California while simply increasing them outside of California). A proposed solution being discussed for energy utilities leakage is that the regulated entity is responsible for all GHGs related to the energy they sell to consumers, regardless of where and by whom it is produced. "Leakage" can also occur when there are more than one way to obtain a product and only one is covered by a cap (in a cap and trade system). For example, some industrial sources may attempt to generate their own power as a way to avoid the costs incurred by the larger energy producers under the cap and trade program. It's unclear what the ARB would intend to do (or could do) in this situation.
(i) Other Policy Directives To Watch For:
The ARB's design and enforcement of programs under AB32 will not only affect big business operations such as power generation and cement production. Instead, it will likely also impact fuel standards, development and land-use policies and electricity generation - which will in turn impact many other businesses. The effects of AB32 will also interact with other environmental legislation.
For example, the ARB's "Economic and Technology Advancement Advisory Committee" (ETAAC) was formed to advise on activities that will facilitate investment in and implementation of technological research and development opportunities in achieving GHG reductions.
ETAAC has recommended activities in the following sectors: (1) "Financial" - e.g.: cleantech promotion / tax incentives; (2) "Transportation" - e.g.: low carbon fuel / vehicle efficiency / tire inflation / port electrification / air conditioning / congestion charges; (3) "Industrial, Commercial and Residential Energy Use" - e.g.: solar / building ffficiency programs/ waste reduction; (4) "Electricity and Natural Gas" - e.g.: energy efficiency programs / renewable energy programs / carbon capture; (5) "Agriculture" - e.g.: biofuels / fertilizer use; (6) "Forestry"- e.g.: reforestation; and (7) "Water" - e.g.: funding water improvements. (See: http://www.etaac.org/jsp/genericdoc.jsp)
In addition, California's "Renewable Portfolio Standard" requires CA's utilities to provide 20% of their power from renewable sources by 2010, and 30% by 2020.
Moreover, the "California Solar Initiative" provides rebates for rooftop solar PV systems with the aim of encouraging investment of 3,000 MW by 2017.
Furthermore, under the "California Environmental Quality Act" (CEQA), "significant environmental impacts" must be listed in an Environmental Impact Report (EIR). It is becoming apparent that California already does require GHG impacts to be considered as part of a CEQA EIR. It is also becoming apparent that the California Attorney General is looking for both a reduction target, and for a plan to reduce GHG emissions in future EIRs.
Tip 12: Can you show ARB how your own business would benefit the goals of California's AB32 or any other of California's climate change programs? Or, can you show how your own business would help others achieve these GHG reduction goals? Or, can you show how any of the ARB's proposed rules could conflict with other California climate change programs or initiatives?
For example, if you make solar panels, can you show how reducing your own operation's GHG emissions could hinder California in reaching its climate change goals? This may be helpful in dealing with the ARB's future restrictions on your operations. Businesses in sectors such as "renewable energy", "energy efficiency", "low-carbon fuels" or "cleaner power plants" should seriously consider having a positive story to tell the ARB regarding the benefits of their own business operations.
(j) Could The System Become Even More Stringent In Future?
AB32 commits California to reduce GHG emissions to 1990 levels by 2020. In addition, however, Governor Schwarzenegger also signed Executive Order S-3-05 in 2005 that committed California to a GHG reduction of 80% (below current levels) by 2050.
Secondly, a growing number of scientists worldwide are stating that existing carbon cap goals (worldwide) are still too low and that any benefits that will be achieved under the present schemes may be still be "too little too late".4 Also according to the international IPCC, GHG emissions must be reduced by 50% to 80% by 2050 to avoid dramatic consequences of climate change.
In view of all this, the rules set forth by ARB under AB32 could potentially be changed to become more stringent in future. Should this happen, what we will probably see is an incredible amount of government and public investment into advanced low-carbon technologies. This future is very hard to predict, but under any scenario, continued tracking and documenting of your GHG emission reductions will be key.
(k) Avoiding Litigation:
In addition to regulatory agencies such as ARB, pressure to reduce GHG emissions (and publicize those efforts) is also coming from shareholders and institutional investors. Pressure for action is also coming from the insurance industry. There have also been tort lawsuits files against utilities and auto companies regarding their contributions to global warming. Energy companies, auto manufacturers and coal mines are quickly becoming the next litigation targets (just like asbestos or tobacco was in the past).
Tip 13: Suggested ways to avoid litigation risk include: (1) doing a GHG emissions inventory; (2) reviewing your use of materials, construction practices, and supply chain; and (3) acquiring open space and maximize its uses.
Tip 14: Corporate Directors should: (1) determine and adopt corporate climate change strategies; (2) include climate change issues in diligence investigations and in the preparation of the corporations audited financial statements; and (3) provide periodic reports of climate change issues and shareholder proposals to board members.
(l) Considering Giving up on California and Moving out of the State?:
You can run - but you cannot hide. Moving part or all of your business operations out of California to avoid compliance with AB32 will likely not sound long term business strategy. California may be leading the way with AB 32, but many states and foreign jurisdictions are also developing similar climate change regulations. More states are being added by the month. At present, 50% of Americans are living in states that have proposed climate change rules.
For example, the "Western Climate Initiative" (WCI) is a regional (5 US states including California, 2 Canadian provinces and one Mexican state) carbon cap and trade system being set up to cover primarily the electricity sector. Draft cap and trade rules are to be released in Aug 2008. WCI's goal set in Aug 2007 was a 15% reduction from 2005 levels by 2020.
In addition, several northeastern states have formed a cap and trade system called the "Regional Greenhouse Gas Initiative" (RGGI). RGGI is a small cap and trade program involving only CO2 emissions from electric utilities (power plants), and only 10% of the credits can be sold into the market. It's first cap and trade rules were issued in 2007. RGGI officially begins trading on Jan 1, 2009.5
Even the US federal government is seriously considering climate change legislation. It is a matter of "when", not "if". The Lieberman-Warner bill proposed GHG reductions of 15% below 2005 levels by 2020, and 70% below 2005 levels by 2050. In January 2008, the budget package signed into law by President Bush contained a provision that required the EPA to establish a mandatory program by mid-2009 requiring US companies to report GHG emissions. However, the law doesn't specify which industries must report (or how often).
American businesses will eventually have to adopt GHG reduction strategies if they have operations in many states or other countries (such as the European Union). Moreover, ARB has explicitly stated that California should partner with other states, Federal agencies and international partners (such as the European Union) in reducing GHG emissions. The European Union's Emissions Trading Scheme (EU ETS) was adopted in 2003 and has been trading actively since 2005. It is the only large-scale system in operation worldwide for dealing with GHG emissions. It only covers carbon dioxide, but it covers 12,000 separate facilities in Europe. The EU ETS has had its problems, and California doesn't want to re-do these mistakes. For example, the EU ETS had a crash that was due primarily to a lack of accurate baseline data. The European Union allocated 90% of the allowances without an auction. This resulted in a windfall to a number of corporations who then passed the costs directly to the consumers. The European Union also recently announced a target to reduce GHG emissions by 20% below 1990 levels by 2020. (And to have a 20% share of renewable energy, up from 8.5% today).
In March 2008, European Union Leaders threatened the US and China with trade sanctions if they wouldn't commit to "ambitious cuts" in GHGs by next year.6
Lastly, Americans have heard much talk of the Kyoto Protocol. Under the Kyoto Protocol, developed countries agreed to an average GHG emission reduction of 5.2% below 1990 levels by 2008 to 2012. (Individual targets vary by nation, and the US negotiated a reduction of 7 percent for itself. The EU's target was 8%). Kyoto's first phase ends in 2012. The United States is not a party to the Kyoto Protocol, but this may change under a future administration.
(m) The "Take Home Message":
Tip 15: Your objectives in responding to any climate change or GHG reduction legislation is to: (1) reduce your emissions, and (2) get credit for it. The key to getting credit for it to is: (1) document your programs, and if possible (2) get involved now with the ARB and the Climate Registry in the development of these programs.
(n) Further Background Reading on Climate Change:
Here is a link to the PEW Reports on Climate Change. The ARB also has a link to these materials on their own website. They provide a good background about climate change: http://www.pewclimate.org/global-warming-basics/climate_change_101
1 Emissions from power imported into California is to be included.
2 These are the same gases listed as Greenhouse Gases (GHGs) in the Kyoto Protocol.
3 New Mexico will be enacting similar rules in 2008, as will Washington and possibly Oregon.
4 See: "A Shift In The Debate Over Global Warming", New York Times, April 6, 2008 at: http://www.nytimes.com/2008/04/06/weekinreview/06revkin.html?_r=1&oref=slogin
5 The first publicly announced compliance trade under RGGI was announced in mid Feb 2008, and auctions of emission allowances are to be held in September and December of 2008.
6 "EU Tells US, China to Cut Emissions", San Francisco Chronicle, March 15, 2008.
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