California Air Resources Board (ARB or Board) staff has been
developing a proposal to amend the California Cap on Greenhouse
Gas Emissions and Market Based Compliance Mechanisms
(Cap-and-Trade Regulation or Program) to extend the Program
beyond 2020, broaden the Program through linkages with other
jurisdictions, comply with the federal Clean Power Plan, and
generally enhance ARB's ability to oversee and implement the
Regulation. These amendments will be first considered at a Board
hearing in September 2016 and voted on at a second Board hearing
in Spring 2017.
Staff's proposal will include amendments for the following main
topics:
-Establish new emissions caps beyond 2020 and continue all other
provisions needed to implement the Program after 2020;
-Establish new linkages;
-Revise the requirements for unsold allowances and vintages
available in the Current Auction;
-Prevent emissions leakage in the most cost-effective manner
through appropriate allowance allocation;
-Continue the allocation of allowances to the utilities on behalf
of rate-payers;
-Provide for California compliance with the federal Clean Power
Plan; and
-Simplify participation in the Program by streamlining
registration, auction participation, information management, and
issuance of offset credits.
To commence the formal rulemaking process pursuant to the
Administrative Procedure Act, ARB will provide a draft of the
formal regulatory package, including the Staff Report: Initial
Statement of Reasons (ISOR), and the Proposed Regulation Order,
to the Office of Administrative Law (OAL) on July 12, 2016. This
submittal initiates a review by OAL prior to opening the formal
comment period. Based on OAL's review, ARB may revise the draft
documents and will post final versions of all documents related
to the rulemaking (including the notice of proposed action, ISOR,
Proposed Regulation Order, and other Appendices) to ARB's
Cap-and-Trade Rulemaking webpage on July 26, 2016. ARB will also
make a rulemaking file for the proposed amendments available to
the public on this date. The formal public comment period will
begin when OAL publishes ARB's notice of proposed action on July
29, 2016.
This rulemaking proposal will include provisions that may impact
the market for the Program's compliance instruments. To ensure
that all market participants and other interested stakeholders
have access to the content of this regulatory proposal at the
same time, ARB will also post the draft Proposed Regulation Order
and draft ISOR (without Appendices) to the What's New box on the
Cap-and-Trade webpage at 5:00 pm on July 12, 2016. See here:
http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm
Please note: The posting by ARB on July 12, 2016 is intended to
provide simultaneous access to staff's proposal as it is
submitted to OAL. This posting will not initiate the formal
public comment period. The official version that will be open
for public comment and Board consideration will be the final
version posted on July 26, 2016 following OAL review. The
official version may include modifications from the initial draft
posted by ARB on July 12, 2016. ARB will send out a listserv
when the formal rulemaking documents are posted on July 26, 2016
and before the public comment period begins on July 29, 2016.
Background
Cap-and-Trade Regulation
ARB first formally adopted the Cap-and-Trade Regulation in
October 2011. The Board has subsequently approved limited
amendments to the Regulation in June 2012, October 2013, April
2014, September 2014, and most recently June 2015. ARB staff has
developed proposals for 2016 amendments that seek to improve
Program efficiency and chart post-2020 implementation of the
Program.
ARB held a number of informal public workshops from October 2015
through June 2016 on some of the proposals that will be included
in this formal rulemaking. Workshop materials are available at:
http://www.arb.ca.gov/cc/capandtrade/meetings/meetings.htm
More information about ARB's Cap-and-Trade Program is available
at: http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm.
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The energy challenge facing California is real. Every Californian
needs to take immediate action to reduce energy consumption. For
a list of simple ways you can reduce demand and cut your energy
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