SACRAMENTO, CA., February 10, 2012
As of January 1, California’s cap-and-trade program is officially state law and on February 1, the California Air Resources Board (ARB) released its calendar of major activities for 2012.
The long journey to California’s cap-and-trade greenhouse gas program began in 2006 with the passage of Assembly Bill 32 which required the state to reduce its greenhouse gas emissions to 1990 levels by 2020. Among several other strategies, regulators chose cap-and-trade as a method to achieve this goal. After five years of careful design, public hearings, and legal challenges, the California ARB voted to approve the program in October. It was officially adopted as law in December and went into effect on January 1, 2012. Although regulators have delayed the first year of compliance until 2013, covered entities will still be responsible for CO2 emitted in 2012 and the first official auction of carbon allowances will take place in August of this year.
2012 promises to be an interesting year in the carbon market. ARB staff will have the task of setting up the infrastructure necessary for a multi-billion dollar market with thousands of participants. For the offset piece of the puzzle, this means officially approving official verifiers to audit projects as well as registries who will approve projects under ARB’s direction. The timeline for these activities was recently established and begins the first quarter of 2012. Once verifiers and registries are approved, project owners will be able to register projects directly under the ARB compliance protocols and avoid the grandfathering process.
Trading volume for exchange-cleared California Carbon Allowances will increase. This will be the result of increased activity from existing participants, new financial participants who have been waiting on the sidelines for regulatory clarity, and the entry of covered entities getting a head start on their compliance obligations. Once the CA ARB program is officially up and running, it will issue its own carbon offsets known as California Carbon Offsets, or CCO’s.
Click here to access the CA ARB 2012 Calendar of Major Activities.