Prior to the workshop, ARB will make the draft changes available in discussion drafts of the cap-and-trade and mandatory reporting regulations that outline changes based on Board direction from the December 2010 consideration of these rules.

The discussion draft will propose to initiate the cap-and-trade program in 2012, but start the requirements for compliance in 2013. Under this proposal, the program would have a 2-year first compliance period rather than the 3-year compliance period originally envisioned. No allowances would be issued for 2012, and there would be no compliance obligation for 2012 emissions. More details on the elements of the program, including auction timing, will be in the forthcoming discussion draft.

In December 2010, the Board directed ARB staff to finalize a cap-and-trade regulation, and corresponding revisions to the mandatory GHG reporting regulation. The cap-and-trade program covers major sources of GHG emissions in the State such as refineries, power plants, industrial facilities, and transportation fuels. The endorsed regulation includes an enforceable emissions cap that will decline over time. The State will distribute allowances, which are tradable permits, equal to the emissions allowed under the cap. Sources under the cap will need to surrender allowances and offsets equal to their emissions at the end of each compliance period.

This workshop is meant to provide an opportunity for staff to explain how Board direction is being incorporated into the regulations and for stakeholders to ask questions about the programs. Staff will also discuss ways to ensure that large industrial sources subject to the recently finalized Energy Efficiency and Co-Benefits Audit regulation be required to take all cost-effective actions identified under those audits.