Wednesday, November 14, 2012

First California Cap&Trade auction happens today; perspective, questions and complaints

California's cap&trade auction is happening today; and the process is simple or murky, depending on how much you want to know.  Hopefully the murky parts will clear up.

A quick perusal of semi-local (to Nevada County) sites reveals that the first auction of permits for the cap&trade part of California's Global Warming Solutions Act, AB32, aiming for rollback to 1990-level emissions (i.e. down 17%) by 2020, happened starting 10am today, Nov. 14.  Results will reportedly be available this coming Monday.

Cap & amp; Trade is just one of the policies CARB is putting in place under the Act.  C&T starts slow and ramps up; at first, 90% of the allowances are free.  Entities can also sell&purchase some carbon offsets (for projects that wouldn't have happened otherwise.) Once the allowances are out there, they get monetized (and shrink each year) & the power of the market gets harnessed to incentivize emissions reductions.

Here are some articles about it:
Last Sunday's SF Chronicle reportedly had some good articles; perhaps among them was this background piece on how it works. ("... uses the power of the marketplace to reduce pollution, in theory doing so at the lowest possible cost....").  If I were ruling California I'd change (link) this part:
(11/20 update: I was wrong, I hadn't read this about how both spending & taxing are needed.)
Where does the money go? [One estimate: it's $964 million, for 1 year] Amazingly enough, this hasn't been decided. By law, money the state raises by selling allowances must be used to help reduce greenhouse gas emissions and cannot simply be dumped into California's general fund as if it were tax revenue. But the Legislature has not yet hammered out the details.
A year ago the NYTimes noted that "[options for using carbon offsets are] severely limited in the California proposal. Only four activities — forestry management, landfill management, manure management and destruction of stores of refrigerants — will qualify." And not for a large proportion of emissions reductions either -  Monday(?)'s SF Chron (link) said "Businesses can satisfy up to 8 percent of emissions reductions through the purchase of carbon credits from forestry and other certified projects."

SPUR (could we have one of these, please?) has a good, quite thorough writeup (Cap and Trade Is Here at Last ) of a panel discussion that they held on Nov. 8, e.g.:
Although the 13-page-long AB 32 did not describe how the state should achieve the emission reductions it called for, it did authorize market mechanisms and delegate program implementation to the California Air Resources Board (ARB). In 2008, the ARB released a scoping plan identifying the sectors of the economy that contribute to global warming and what policies should be targeted to those sectors to achieve them. Although cap and trade only covers about 20 percent of total emissions at first, Jackson said it was a critical piece of the carbon tool kit for four main reasons:  [sets a limit on emissions at the source; puts a price on carbon; is a backstop if other parts underperform; is enforceable on individual emitters]
 KQED's "Cap and Trade 101" notes that a business has 3 options for its emissions: reduce them, get "allowances" to emit them, or buy carbon offset credits.

The NYTimes had a good piece about emissions trading, pointing out how well it works, but I'm not finding a link to it at present.

The LA Times said
This year, the program covers about 350 industrial businesses operating a total of 600 facilities throughout the state. They include cement plants, steel mills, food processors, electric utilities and refineries.

Of these 350+ businesses, it's not clear which if any are based in Nevada County; I couldn't find a list on CARB's Cap-and-Trade home page (left a msg, but no phone call yet.)

The CARB website feels painfully user-indifferent; if you have a specific question, you probably won't find the answer.  Why is there no user-accessible HTML writeup?  (How about linking to & helping to maintain a Wikipedia page on Calif's cap-and-trade program?)  Why are documents in PDF?  Where is the glossary? Why do FAQs not provide the opportunity to ask a question that hasn't already been addressed?  Why doesn't a CARB representative engage with the public in an Ask Me Anything on Reddit?  This seems much better use of everyone's time, than an evanescent meeting.

On the other hand, if as the NYTimes said in 2010, "state regulators [had] released hundreds of pages of rules...for how the law is to be applied, industry by industry", the desire for simple & easily-accessed info may be unrealistic.

Some questions:
How is it decided which companies needed to be involved in today's auction?  What does next spring's Reserve Sale sell?  How do I know what I need to do if my business is _____?  What are the other policies CARB is implementing besides Cap&Trade?  What is the best way for journalism to present this info?  (There seems to be a LOT of duplicated effort, both between news orgs and across stories from the same one.)

Written 11/14; actually published 11/17

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