BOARD MEETING DATE: June 6, 2008
AGENDA NO. 37

PROPOSAL:

White Paper on SoCal Climate Solutions Exchange

SYNOPSIS:

At the February 2008 Governing Board meeting, the Board approved development of the SoCal Climate Solutions Exchange. Staff has prepared this White Paper with initial recommendations, and will seek the Board’s direction regarding proceeding with rule development.

COMMITTEE:

Climate Change, March 20, 2008 and May 28, 2008, Reviewed

RECOMMENDED ACTIONS:

  1. Receive and file; and
  2. Direct staff to begin formal rule development.
     

Barry R. Wallerstein, D.Env.
Executive Officer


Background

At the February 2008 Governing Board meeting, the Board approved development of the SoCal Climate Solutions Exchange, one of AQMD Governing Board Chairman Dr. Burke’s initiatives for 2008. The Board requested a two-step process. The first step is discussion of initial recommendations described in this White Paper at the June 2008 Governing Board meeting. Staff is recommending that the Board direct staff to proceed with rule development, which is the second step of the process.

There is a real, pressing need for greenhouse gas reductions that facilities in the Basin can have confidence in when they mitigate their climate change impacts. Purchasing greenhouse gas offsets is being done voluntarily in many cases, and is also being required or requested under CEQA.

The objectives of the SoCal Climate Solutions Exchange are to provide high quality greenhouse gas emission reductions that enhance the local economy and capture needed co-benefits for Southern California as businesses achieve voluntary, early reductions of greenhouse gases. This White Paper includes brief background information on climate change and how the SoCal Climate Solutions Exchange can assist in providing a mechanism to recognize and quantify voluntary early reductions. A local program operated by AQMD can ensure that reductions are real, additional (surplus), quantifiable, verifiable, permanent over a specific time, and enforceable. This will be of great value to facilities that need offsets for CEQA or other environmental mitigation, and may be of use for early compliance with future AB 32 requirements.

This White Paper provides suggested design principles, describes the public and agency process thus far, and includes staff’s initial recommendations for the SoCal Climate Solutions Exchange and a greenhouse gas Air Quality Investment Program (AQIP).

Initial Staff Recommendations

The SoCal Climate Solutions Exchange would be a voluntary program where facilities in the District could undertake projects to voluntarily reduce greenhouse gas emissions in advance of any regulatory requirement. These projects would follow pre-approved protocols developed by CARB, the California Climate Action Registry (CCAR), or AQMD staff. It is staff’s intention to work closely with these other agencies to develop as many protocols as possible to encourage voluntary early actions and to be able to have those reductions quantified. AQMD staff will submit for Governing Board approval all protocols to be used for the SoCal Climate Solutions Exchange.

Staff’s initial recommendations are that any project in the District could generate reductions per an approved protocol, and there would not be any restrictions on how those reductions could be purchased or used. AQMD staff would act as verifiers for the reductions and the SoCal Climate Solutions Exchange would include a mechanism for certification, registration, and tracking of the reductions.

An AQIP would enable the AQMD staff to collect funds from parties that need certified emission reductions, pool those funds, and use them to reduce greenhouse gases. These projects would also follow the pre-approved protocols. AQIP projects could be directed to environmental justice areas to take advantage of criteria or toxic pollutant co-benefits that occur with many greenhouse gas reduction projects.

The White Paper includes a description of staff’s recommendations for the SoCal Climate Solutions Exchange. These include the scope of the Exchange, generation and potential use of certified reductions, ownership, additionality, the AQIP, incentives for Environmental Justice areas, recommendations related to running the Exchange, protocols, verification, and program review.

Appendices include information on international, national, regional, state, and local climate change programs, a discussion of other voluntary greenhouse gas trading programs, a description of how surplus reductions are determined in other programs, key stakeholder comments, and information on what protocols are in existence, are under development, or have potential for development and use. The last appendix, Appendix F, lists acronyms used in the document.

Public Process

The Governing Board established a Climate Change Committee, which met on March 20, 2008 and May 28, 2008 to work with staff on this initiative. In addition, Climate Change was discussed at the Governing Board’s April 17, 2008 retreat.

Staff has been working with a Technical Advisory Group comprised of representatives from CARB, CCAR, environmental and community groups, industry, academic institutions, and local government. The working group participants helped brainstorm initial concepts and provided valuable insight and perspectives on key design elements. The input from this group has influenced staff’s recommendations/concepts, which are reflected in the White Paper. This group has met four times, on March 19, 2008, April 2, 2008, April 23, 2008 and May 22, 2008. The meetings were open to the public, and other attendees also provided beneficial input.

Staff has also been working with CAPCOA, CARB and CCAR regarding protocol development. There is a commitment to work cooperatively to prioritize protocol development and to have many air districts work on additional protocols. This will take advantage of resources and expertise, and result in more protocols available for use in multiple programs.

AQMP and Legal Mandates

There are no AQMP or legal mandates that require this program.

Resource Impacts

The Board-approved FY 08-09 budget includes adequate resources for rule development. The actual resource impacts of operating the Exchange will depend on the final design of the program and will be presented as part of the rulemaking package.

Attachment (doc 255KB)
MS Word reader link

  1. White Paper: SoCal Climate Solutions Exchange

 




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