BOARD MEETING DATE: November 7, 2008
AGENDA NO. 34
PROPOSAL:
Adopt Proposed Rules 2700 – General and 2701 – SoCal Climate Solutions Exchange
SYNOPSIS:
These proposed rules have been developed for the Board’s consideration to assist local businesses and others by providing high quality certified greenhouse gas emission reductions for voluntary actions.
COMMITTEE:
Climate Change, March 20, 2008, May 28, 2008, September 19, 2008, and October 29, 2008, Reviewed
RECOMMENDED ACTIONS:
Adopt the attached resolution:
- Certifying the Notice of Exemption for Proposed Rules 2700 – General and
2701 – SoCal Climate Solutions Exchange; and- Adopting Rules 2700 – General, and 2701 – SoCal Climate Solutions Exchange.
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 was development of a White Paper and discussion of initial recommendations at the June 2008 Governing Board meeting. The Board then directed staff to proceed with rule development, which was the second step of the process.
This proposal represents the evolution of the concepts that were described in the White Paper. Staff is proposing Rule 2700 – General, and Rule 2701 – SoCal Climate Solutions Exchange for the Board’s consideration. This will set up the administrative structure to enable voluntary greenhouse gas emission reduction projects in the AQMD. Proposed Rule 2702 – Greenhouse Gas Reduction Program, which would establish an air quality investment program where the AQMD could collect funds and solicit greenhouse gas reduction projects, will be proposed at a later date.
There is a real, pressing need for high quality greenhouse gas reductions that facilities in the Basin can have confidence in when they seek to 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 certified greenhouse gas emission reductions that enhance the local economy and capture needed co-benefits for Southern California as businesses achieve voluntary reductions of greenhouse gases. 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 reductions for CEQA or other environmental mitigation.
Proposal
The SoCal Climate Solutions Exchange would be a voluntary program where facilities in the AQMD could undertake projects to voluntarily reduce greenhouse gas emissions in advance of, or in the absence of, any regulatory requirement. These projects would follow pre-approved protocols which may have been approved by CARB, and AQMD. There are currently three protocols that have been approved by CARB that are included in Proposed Rule 2701.
It is staff’s intention to work closely with other agencies to develop as many protocols as practicable 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. In addition, staff will seek concurrence by CARB, through their Governing Board or Executive Officer, for any additional protocols recommended for inclusion in Proposed Rule 2701.
Public Process
The Governing Board established a Climate Change Committee, which has met five times this year. The SoCal Climate Solutions Exchange was discussed at most of these meetings. In addition, climate change issues were discussed as an agenda item 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. This group met four times before the White Paper was presented to the Board (March 19, 2008, April 2, 2008, April 23, 2008 and May 22, 2008). The Technical Advisory Group also met on October 2, 2008. The meetings were open to the public, and other attendees also provided beneficial input. A public workshop was held on September 4, 2008, as well.
Staff has also been working with CAPCOA and CARB 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.
Key Issues
Staff worked closely with the Technical Advisory Group to address issues and incorporate suggestions. However, there are a few remaining issues, which are summarized below. The key issues are listed here, and Attachment B and the staff report provide additional information.
While many see benefits of this voluntary program, one industry group questions whether a local greenhouse gas reduction program is needed. Staff believes that there is benefit to having a program in the Basin where high quality emission reductions certified by AQMD staff will give confidence that reductions are real and verifiable. In addition, there is great potential for bringing local investments, jobs, and clean technologies into this area. Since many greenhouse gas reduction strategies also result in reductions of criteria or toxic pollutants, such strategies can offer co-benefits for the Basin’s air quality.
Another concern expressed is that AQMD is assuming too many roles and there are insufficient checks and balances. For Proposed Rule 2701, District staff would verify and then list certified greenhouse gas emission reductions on the AQMD’s web site. In other greenhouse gas programs, verification is done by contractors who are not in the same organization that registers reductions. AQMD staff does not believe that handling verification and listing would create any problems. The staff report details how the various functions of credit programs are handled in other programs, including many different current or past AQMD programs. Staff is not taking on additional responsibility as compared to similar functions in the past. A transparent public process and recommended oversight for this voluntary program should help alleviate this concern. In addition, an appeals process has been added to Proposed Rule 2701.
CEQA
The proposed project has no potential to adversely impact air quality or any other environmental area because both Proposed Rules 2700 and 2701 are administrative in nature. AQMD is not involved with funding or generating greenhouse gas emission reductions under these two rules. As a result, the proposed project is exempt from CEQA pursuant to state CEQA Guidelines §15061(b)(3) – Review for Exemption. A Notice of Exemption will be filed with the county clerks of Los Angeles, Orange, Riverside and San Bernardino counties immediately following the adoption of the proposed project.
Socioeconomic Analysis
Proposed Rules 2700 and 2701 represent a voluntary program. Businesses and individuals will not participate in the proposed program if there is no perceived benefit. As such, no negative socioeconomic impacts are expected. Since the rules do not significantly affect air quality or emissions limitations, the law does not require a socioeconomic assessment.
AQMP and Legal Mandates
There are no AQMP or legal mandates that require this program.
Resource Impacts
Existing resources should be sufficient to implement this proposal. Fees will be charged to support implementation of the program.
Attachments (ZIP, 2.44Mb)
A. Summary of Proposal
B. Key Issues and Responses
C. Rule Development Process
D. Key Contacts List
E. Resolution
F. Rule Language
G. Staff Report
H. Notice of Exemption