April 18,
2008
Kevin Kennedy
Chief, Program
Evaluation Branch
Office of Climate Change
1001 “I” Street
Role of Offsets in Reducing Greenhouse
Gas Emissions under AB 32
Dear Mr. Kennedy:
Sierra Club California believes that offsets may
have a role in reducing greenhouse gas emissions as required by the California
Global Warming Solutions Act of 2006, but that offsets should be limited to
assure the integrity of the emission reductions and fulfill the letter and
spirit of the law. Offsets can provide a limited amount of flexibility
under the cap where it is technically or economically difficult to reduce
emissions directly. But, without limits,
an offset program would create a strong temptation to seek offsets that may appear to be cheaper and
easier to acquire than emissions reductions within the system, but that raise
the risk of underperformance or nonperformance
AB 32, which we strongly supported, drew much of its
backing from the prospect that an enforceable cap on our state’s greenhouse gas
emissions would spur the technological innovations required to fundamentally
transform our energy economy, and that California would benefit by creating the
green technologies that the rest of the country and the rest of the world will
demand. Curbing global warming will require a rapid greening of our vehicles,
fuels and power plants. The clean energy revolution will be retarded if those
sectors are able to comply with AB 32 requirements by outsourcing their emission
reductions to other sectors and other jurisdictions.
AB
32 sets an economy-wide limit on global warming pollution, so reductions will
be needed from every major sector of the state’s economy. Offsets do not
provide additional reductions towards the 2020 limit, but rather provide
emission reductions in a sector outside the cap and trade program instead of
emission reductions in a capped sector. Therefore, CARB should use
regulatory programs and other policies to achieve emission reductions in sectors
outside the scope of the cap and trade program, so
that they can contribute to meeting the statewide 2020 limit, and the further
reductions necessary to meet the state’s 2050 reduction goal. A necessary
precondition to including offsets in a cap-and-trade program is a tight cap; if
offsets are allowed, they should be subject to at least the following
conditions:
Represent
a limited portion of covered entities’ compliance obligation, to ensure that
offsets are a limited fraction of the reductions the overall program would
achieve;
Discounted
where appropriate to compensate for loss of local or in-state environmental
benefits and for the uncertainty of the emission reductions;
Limited
to specific project types that have stringent protocols to ensure the emission
reductions are real, quantifiable, additional (beyond business as usual),
permanent, subject to independent third-party verification and enforceable by
CARB; and
Priority
should be given to projects that will provide environmental co-benefits to
California, especially in communities suffering from excessive levels of
pollution. AB 32 requires CARB to ensure that its implementation rules
“complement, and do not interfere with, efforts to achieve and maintain federal
and state ambient air quality standards and to reduce toxic air contaminant
emissions.”
Offsets from sinks, such as afforestation,
reforestation and avoided deforestation, as well as other changes to land use,
should not be allowed on a project basis.
Accumulating research indicates that additionality
and performance risk are very difficult to measure, even to the extent of
separating the effects of climate change itself from human activities such as
forest management. For the time being, the risks of underperformance and
effective leakage in sinks-based offsets outweigh the robustness of possible
benefits. While government and private support of
improved soil carbon content and reforesting are highly desirable, it is impossible to retain the integrity
and effectiveness of a program to reduce domestic Co2 emissions if it is
combined with an offset mechanism for efforts to preserve and enhance carbon
sinks. We need both 80% reductions in domestic CO2 emissions and strong
programs to enhance carbon sinks; we should not “trade” them off against each
other. The ability of forests to store carbon should not become a justification
for maintaining higher emissions of air pollution.
Respectfully,
Bill Magavern
Director