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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

Attachment:

Original File Name:

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.


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