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Comment 14 for Analysis to Identify Potentially Significant Environmental Effects of Proposed Cap-and-Trade Regulation (aug-23-fed-ceqa-ws) - 1st Workshop.
First Name: Shelly
Last Name: Sullivan
Email Address: ombcomm@arb.ca.gov
Affiliation: AB 32 Implementation Group
Subject: Cap-and-Trade FED
Comment:
Thank you for meeting with the AB 32 Implementation Group earlier this week regarding the FED in a cap-and-trade system. Per the California Air Resources Board’s request, the AB 32 Implementation Group would like to submit the following points for consideration as you move forward with the FED regulation development. POINT ONE: In the FED regulation development we ask you to continue to consider the existing criteria pollutant and air toxics control programs that are currently being complied with in existing law, as well as, recognizing a federal EPA program is on the horizon. The cap-and-trade regulation must meet the appropriate CEQA standards, yet the outline of the regulation is still under consideration. We recommend that the broadest possible design elements be considered, yet the potential outcomes should be informed by what companies can reasonably be expected to do in response to the program requirements. POINT TWO: By design, the cap-and-trade program is a flexible program to allow companies to achieve emission reductions where they are most cost effective. Where emission reductions onsite are very expensive, untimely, or infeasible, the option to comply with trading of allowances or offsets is crucial to avoid economic, as well as environmental failure of the program. This makes it hard to predict exactly how, where and when projects and their environmental impacts will be felt. However, there are many factors besides the cost of allowances that will impact how a company will meet their compliance obligation. Other factors will incline companies to perform on-site reductions rather than purchasing allowances or offsets. Allowance trading and offsets would be used as a bridge during the years before such on-site reductions could be accomplished. Onsite reductions may be done because: In the early years, the amount and availability of offsets may be more limited than in the future. A higher price for allowances will encourage on-site reductions, and fears about the potential prices of allowances will spur all reasonable action to reduce emissions onsite. In the long term, energy efficiency measures will pay-off in a predictable way, while the risk of uncertain and potentially ever higher allowance prices may be unacceptable. The company may have a strategic plan that includes on-site solar, wind or other high-technology energy efficiency measures to improve customer or public relations. The onsite emission reduction strategy is only part of a comprehensive modernization or investment plan and the costs are partly absorbed in the larger project. Federal or other laws require on-site emission reductions, such as may be imposed by the EPA GHG regulations. Because all offset projects under cap-and-trade must be additional to otherwise occurring emission reductions, it is safe for the FED to assume incremental GHG benefits from offsets, as well as, the mitigation of all other environmental impacts as stated above. POINT THREE: The major stationary sources covered by the cap-and-trade program are heavily regulated by regional, state and federal environmental agencies. Any project to reduce GHG emissions will likely require extensive environmental review. This makes it unlikely that this aspect of the cap-and-trade program will have an unmitigated impact on the environment. By the same token, offset projects will be subject to very stringent requirements and their use in the program will have no unmitigated impacts. The US EPA program will add another layer to this process and should considered in the FED. The environment should be indifferent to the choices to be made in the cap-and-trade between these alternatives. Thank you, again for your consideration of these points. If we can be of further assistance, please feel free to contact us at (916) 858-8686. Shelly Sullivan
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Date and Time Comment Was Submitted: 2010-09-16 08:21:06
If you have any questions or comments please contact Office of the Ombudsman at (916) 327-1266.