In July 2017, California voted to extend its cap-and-trade scheme until 2030. Some environmental groups and the oil and gas industry support the legislation. Environmental justice groups oppose it. This post summarises some of the responses to the continuation of cap-and-trade in California.
Carbon trading is no solution
Dr. Michael Dorsey and Jane Williams write that “Pollution trading will never be the climate solution for California — or anywhere”. They point to the more than a dozen major banks that have closed their carbon trading desks. They write that,
Carbon trading was born with one foot in the grave and another on the banana peel. Gov. Brown’s championing free-market claims of the efficacy of cap-and-trade are a hair removed from the “voodoo economics” of the Reagan-era.
Nowhere on earth — not in the largest market (the EU ETS), nor in the smaller regional markets from the New England Regional Greenhouse Initiative (RGGI) market to the California cap-and-trade market to the newly minted Chinese market — has the carbon price ever been sufficiently high enough to drive the technological innovation to fully stop carbon pollution.
The climate science is clear, Dorsey and Williams write. We have to reduce emissions from all sources as soon as possible, especially fossil fuels. “AB 398 completely ignores the consensus scientific mandate to keep fossil fuels in the ground.” Instead it relies on the fallacy that emissions can be offset.
Against environmental justice
California Environmental Justice Alliance directors, Strela Cervas and Amy Vanderwarker, look in detail at the implications of AB 398 from an environmental justice perspective. CEJA works with low-income communities and communities of colour, who live next to California’s largest sources of greenhouse gas emissions and other pollutants: refineries and power plants.
CEJA pushed for legislation that would have required California to reduce emissions directly rather than relying on a market-based cap-and-trade mechanism. In addition to being the most direct way of reducing greenhouse gas emissions, the legislation would have also improved local air quality in communities living on the frontlines of pollution.
Cervas and Vanderwarker write that AB 398 fails to meet any of the desired environmental justice outcomes. They highlight three major problems with AB 398:
Regulatory rollbacks: Local air districts are prevented from enacting CO2 regulations on pollution sources covered by cap-and-trade. And the California Air Resources Board is prevented from enacting new regulations on oil and gas production facilities that would reduce greenhouse gas emissions.
Making it more difficult to achieve 2030 greenhouse gas emission reduction goals: AB 398 aims to make it as cheap as possible for industry to comply, through offsets, price reductions in the cap-and-trade market, and locking in free allowances. AB 398 fails to address the over-allocation of allowances, which keeps prices low, and helps avoid emissions reductions because industry can buy up cheap allowances.
Undermining climate revenues: A higher price of carbon might drive businesses to change. AB 398 “does nothing to help with that”, Cervas and Vanderwarker write. The bill includes tax breaks and a fee repeal that will reduce investments by about US$300-500 million per year.
Cervas and Vanderwarker conclude that,
In the coming years, CEJA, our members and partners will be working to minimize the negative impacts of these provisions. We will continue our fight for equitable climate policy, and hope that legislative offices, agencies and environmental organizations join our effort.
Millions of oily dollars behind cap-and-trade
Anne C. Mulkern writes on E&E News that business spent millions lobbying for the continuation of cap-and-trade in California:
At least seven oil companies and the petroleum trade group Western States Petroleum Association (WSPA) together doled out more than $34 million to persuasion efforts from 2015 through the first quarter of this year. The parent companies of the three biggest investor-owned electric utilities spent a combined $9.1 million. Four agriculture groups bankrolled nearly $1.6 million.
Two days after Governor Jerry Brown signed AB 398, the California Air Resources Board approved a resolution 17-21. Writing on the website CALmatters, Julie Cart and Laurel Rosenhall note that a paragraph tucked away in this resolution “will likely result in benefits worth hundreds of millions of dollars for the oil and agriculture industries”. They write that,
The deal would provide maximum compensation to companies for the extra cost of doing business in a state with the nation’s toughest emissions standards. But some critics say it merely gives a lucrative financial leg-up to polluting firms that don’t need it—and by removing some of those firms’ incentives to reduce greenhouse gas emissions, could even undermine cap and trade’s prime goal.
Environmental racism
Michelle Chan, Vice President of Programs at Friends of the Earth US, describes California’s climate bill as “a huge blow to the cause of environmental justice worldwide”.
In Richmond, California, Chevron plans a major refinery expansion to process tar sands crude. For several years, environmental justice activists have been campaigning against the expansion. They fought for the regional air pollution regulator, the Bay Area Air Quality Management District (BAAQMD), to establish a refinery-based cap on pollution, including greenhouse gases.
In May 2017, BAAQMD approved a motion to finalise a refinery pollution cap – the world’s strongest and most ambitious. Public health experts estimate that the cap could prevent between 800 and 3,000 deaths over 40 years.
Chevron killed the pollution cap through the cap-and-trade bill AB 398, which prevents local air quality agencies from establishing rules limiting greenhouse gases. This was one of the items on the Western States Petroleum Association’s wishlist for California’s climate legislation.
In Richmond, 80% of the people living within 1.6 kilometres of Chevron’s refinery are people of colour. The vast majority of the people that Chevron’s increased pollution will kill, will be people of colour. And that’s exactly what environmental racism looks like.
Full disclosure: This post is part of a series of posts and interviews about California’s cap-and-trade scheme, with funding from Friends of the Earth US. Click here for all of REDD-Monitor’s funding sources.
California’s Global Warming Solutions Act of 2006 (AB 32) expires in 2020. California’s governor, Jerry Brown, is holding a series of closed-door negotiations with the fossil fuel industry to re-write California’s climate change policy for the period 2021 to 2030.
Early in June 2017, two Assembly Bills (AB 151 and AB 378) failed to get past California’s Assembly.
AB 378 was authored by Christina Garcia and two other Democrat Assembly members. It was supported by the California Environmental Justice Alliance and other members of California’s Environmental Justice movement.
AB 151 was also authored by Democrat Assembly members – Autumn Burke and Jim Cooper. It was far more industry-friendly than AB 378, and was supported by the Western States Petroleum Association and other industry groups.
AB 151 has not been put to a vote in California’s Assembly.
A third bill, SB 775, is also supported by Environmental Justice organisations. It was put forward by state Senator Bob Wieckowskiand state Senate President pro Tempore Kevin de León. The bill remains in the Senate.
SB 775 proposes a new cap-and-trade scheme that would not allow carbon credits to be carried forward from the existing scheme. It would include no offsets, no free pollution allowances, and a per-capita dividend. Under SB 775 carbon credits would be auctioned off. There would be a floor price of US$20 per ton, and a price ceiling of US$30. The floor would rise by US$5 each year and the ceiling by US$10, plus inflation. Credits cannot be carried over from one quarter to the next, so firms cannot “bank” credits.
By ruling out carbon offsets, SB 775 would also rule out the possibility of the oil industry and other polluters in California using REDD credits to continue polluting.
Carbon traders, the oil industry, and “environmental” groups like EDF, opposed SB 775.
In response to a question about the impact of SB 775 on carbon markets during a press conference, de León replied,
Let me go back to the folks who are actually holding the allowances right now, as we speak. Our goal and our responsibility and our objective is to create jobs and put people to work and expand the middle class. That’s our job. Our job is not for those who are speculating on the market right now, who are trying to profit and buy low and sell high. That’s not our responsibility. Our responsibility is for economic growth, create jobs, expand the middle class, create the necessary technologies that will actually help us meet our 2030 targets, and reduce carbon and other harmful pollutants that our children breathe into their lungs.
At the end of May 2017, Adam Gray and other business-friendly Democrats put forward their proposal for extending cap-and-trade beyond 2020.
Jerry Brown’s oily friends
This, then, is the political environment in which Governor Brown has turned to his friends in the oil industry. In These Timesreports that leaked documents show that “California’s fossil fuel industry is trying to write state climate policy to its liking”. The evidence is pretty overwhelming.
And allowing the oil industry to be involved in writing climate policy is like asking the fox how big the holes in the fence around the chicken coup should be.
A previous post on REDD-Monitor looks at Brown’s cosy links with the oil industry – the industry that California’s climate policy is supposed to be regulating.
It’s also worrying that Brown appears not to understand how cap-and-trade works. Brown says that,
“Cleaning up the air where it’s most dirty makes a lot of sense. With cap and trade, we’ll have billions of dollars to achieve just that.”
Rather than the government paying to clean up the air, it’s obviously better to stop corporations from polluting in the first place. By allowing companies to buy carbon credits, cap-and-trade allows pollution to continue.
The irony is that California has reduced its emissions under AB 32. But not as a result of carbon trading. As David Roberts points out in an article about SB 775 on Vox,
Regulations, not carbon pricing, have been the main driver of California’s carbon reductions to date. In fact, they have been so effective, and carbon reductions so much cheaper than expected, that there hasn’t been much work left for the cap-and-trade program to do. Near-term emission goals are being reached without its help.
The logical way forward is to strengthen regulations and limit carbon trading. That’s more or less what SB 775 does. Even better would be abolishing carbon trading altogether, of course.
Brown wanted a decision on extending California’s cap-and-trade scheme by the end of budget negotiations in June 2017. That didn’t happen, but the Los Angeles Times reports that Brown’s advisers hope to get a vote on extending cap-and-trade in early July 2017. California’s lawmakers leave for their summer recess on 21 July 2017.
The Brown Administration’s draft proposals echo the oil industry’s wishlist
The Brown Administration’s latest draft proposals would continue California’s current cap-and-trade scheme. The draft proposals have not been publicly released, but are available here, here, and here. When asked by the Los Angeles Times about the proposals, Brown replied, “Can’t talk about it.”
The Western States Petroleum Association has produced a wish list of what it wants to see in California’s climate legislation:
In adopting a regulation applicable from January 1, 2021 to December 31, 2030 pursuant to this subdivision, the state board shall do all of the following:
(1) Establish a price ceiling at $63 per metric tonne in 2021, increasing by 2 percent plus the consumer price index annually thereafter. The price ceiling shall ensure compliance can be achieved at a price no greater than the ceiling, and monies generated through compliance at the price ceiling shall be used by the state board to achieve emissions reductions that are real, permanent, quantifiable, verifiable, enforceable by the state board and in addition to any greenhouse gas emission reduction otherwise required by law or regulation, and any other greenhouse gas emission reduction that otherwise would occur.
(2) Establish two price containment points at levels below the price ceiling. The state board shall offer to covered entities non-tradable allowances from the allowance price containment reserve for sale at these price containment points.
(3) Establish a limit of no greater than 6 percent of a covered entity’s compliance obligation that may be met by surrendering offset credits.
(4) Develop approaches to increase offset projects in California.
(5) Set industry assistance factors for allowance allocation commencing in 2021 set at the levels applicable in the 2015-2017 compliance period. Apply a declining cap adjustment factor to the industry allocation equivalent to the overall statewide emissions declining cap.
(6) In 2025, the state board shall assess changes in trade-exposure and the need to achieve greenhouse gas emission reduction targets and may revise the requirements established in sections (1), (3), and (5) above based on this assessment.
The second draft proposal describes provisions to monitor air quality at selected location in California, including in disadvantaged communities, and at major pollutants such as oil refineries. It also includes a community plan programme aimed at reducing pollution, prioritising disadvantaged communities.
The third draft proposal is probably the most egregious. In its 2017 Climate Change Scoping Plan Update, the California Air Resources Board proposes reducing emissions from oil refineries by 20%: “Direct regulations would be promulgated to improve efficiencies across the sector”.
The third draft proposal would replace the regulation of refineries (which would reduce emissions) with carbon trading (which would allow emissions to continue):
The state board shall designate the market-based compliance mechanism … as the rule for petroleum refineries and oil and gas production facilities to achieve their greenhouse gas emissions reductions.
Having weakened how emissions from refineries are regulated, the third draft proposal then prevents local districts from regulating emissions of greenhouse gases from polluting corporations if those corporations are subject to the carbon trading mechanism.
Liza Tucker of Consumer Watchdog told In These Times why the oil and gas industry is so keen on carbon trading,
“They want to eliminate the possibility of direct regulation of their pollution, because that’s going to be more expensive … because of the advantageous way that the cap-and-trade system is currently structured, so they can view carbon trading as a flim-flam where they can keep doing business as usual.”
Brown as stenographer for Chevron
The Brown Administration’s draft proposals clearly echo the Western States Petroleum Association’s requests for loopholes to be built into California’s climate legislation.
RL Miller, Chair of the Environmental Caucus of the California Democratic Party, accuses Brown of “acting as the stenographer for Chevron”.
SOURCE & Full disclosure: This post is part of a series of posts and interviews about California’s cap-and-trade scheme, with funding from Friends of the Earth US. Click here for all of REDD-Monitor’s funding sources.
California Governor Jerry Brown has aggressively positioned himself as a global climate leader to fill the vacuum created by the arrival of an ignorant climate change denier in the White House. But not all that glitters is green. The Governor has spent the last months promoting the expansion of complicated market-based carbon trading mechanisms, known as “Cap-and-Trade,” as a cornerstone of state and global climate policy — in a move that directly threatens vulnerable communities both in California and abroad.
California’s current Cap-and-Trade program is set to expire in 2020. Last summer the state legislature established ambitious and unprecedented emissions reductions goals for 2030, without extending the authorization of Cap-and-Trade. The Governor signed the emission reductions goals into law — but he made it clear that Cap-and-Trade was the primary option he would consider for meeting those goals.
Intertwined with Governor Brown’s persistent campaigning for Cap-and-Trade, the oil and gas lobby in California, along with a multitude of industrial manufacturers, the carbon-trading lobby, and a number of business friendly environmental organizations, have also been pushing hard to make the market-based mechanism the foundation of future California climate policy.
This summer Governor Brown has gone into a full-court press to pressure the California legislature to approve a Cap-and-Trade program that would rely heavily on “offsets” — a type of carbon “credit” that a polluter, such as an oil refinery can purchase to legally “neutralize” its pollution — despite the fact that the pollution still occurs. Regardless of the dubious science and documented injustices of offset schemes, Governor Brown, the oil and gas industry, and their allies among a few of the big green groups have continued to aggressively promote the use of offsets as a primary means to achieving California’s emission reductions goals.
Among the offset schemes that the Governor and fossil fuel companies such as Shell, BP, and Chevron want incorporated into the state’s Cap-and-Trade program are a variety of tropical forest carbon offset which would come from partner jurisdictions around the world, such as Central Kalimantan, Indonesia, or Cross River State, Nigeria. Governor Brown has also continued to operate from a 2010 Memorandum of Understanding signed between California and the states of Chiapas, México and Acre, Brazil back when Arnold Schwarzenegger was governor of California. Acre is specifically highlighted in current proposals as the first tropical forest state with which California plans to “link” its carbon market. The linkage would be based on an international carbon trading program known as Reducing Emissions from Deforestation and Forest Degradation, or REDD. Due to conflicts and human rights concerns regarding indigenous land rights and violations of the right to Free, Prior, and Informed Consent, REDD has become one of the most controversial and high-risk climate policy programs out there.
In facing the development of these market-based policies in far-away places like California, forest communities of the Brazilian Amazon recently held a gathering in the rubber tapper stronghold of Xapuri. Xapuri was the home of the internationally known labor and land rights advocate Chico Mendes, who was assassinated in the late 1980’s for opposing road building and other mega-projects in the Amazon. Representatives of indigenous and traditional communities that are currently and potentially affected by REDD projects and associated tropical forest management schemes came together in Xapuri at the end of May to discuss the impacts of climate policy on their access to territory, their forests, and their livelihoods.
Among the organizers of the gathering was Dercy Telles, who worked side by side with Chico Mendes in the years before his assassination. During the gathering Dercy was moved to make a brief video statement for California policy makers and climate activists who may not be aware of the problems with tropical forest carbon offset schemes, and for California activists on the frontlines of day-to-day pollution from California’s fossil fuel industry.
In her statement, Dercy describes how their forest communities must fight against policies like REDD that “aim to exterminate rural populations.” She minces no words in describing that their communities have come to see these climate policies as “nothing but a bunch of false solutions to global warming issues” “based on lies” and “on selling illusions to the less privileged.” The forest people of the Amazon, Dercy says, “want people in California to know that we are fighting the same fight in solidarity” and that “we are going to keep on fighting for as long as we have strength and courage.”
Gov. Jerry Brown has so far been unable to muster two-thirds of state legislators to vote to extend the program beyond its current 2020 expiration.
By Will Parrish
Environmentalists say cap-and-trade doesn’t cut enough emissions in the East Bay.
California’s cap-and-trade program is a cornerstone of the state’s effort to curb greenhouse gases. But it’s also in crisis.
Faced with Republican opposition, Gov. Jerry Brown has so far been unable to muster two-thirds of state legislators to vote to extend the program beyond its current 2020 expiration.
Meanwhile, the latest auction of carbon dioxide-emission allowances in May, which was supposed to generate more than a half-billion dollars for politicians to spend, brought in a paltry $10 million, as the California Air Resources Board sold a tiny fraction of the allowances it was offering.
The governor has negotiated with oil-industry leaders about the possibility of scaling back some of California’s climate-change programs in exchange for the industry’s support for extending cap-and-trade, the Los Angeles Times reported earlier this month. And the Western States Petroleum Association, the main lobbying group for oil corporations in six western states, is especially keen on repealing California’s low-carbon-fuel standard, which is the world’s first regulatory program to require oil suppliers to slash the carbon footprint of their motor fuel.
But environmentalists are urging Brown not to “send the state’s climate change policies backward,” as Amy Vanderwarker, a co-director of the Oakland-based California Environmental Justice Alliance, put it. She and other advocates say cap-and-trade’s recent stumbles actually open the door to far better climate change policies.
For instance, her organization is supporting Assembly Bill 197, introduced in June by Assemblymember Eduardo Garcia, a Democrat from Coachella. The proposed law deals at once with emissions, public health, and eco-injustice, activists say. It also encourages direct emissions reductions by the state’s oil refineries, fossil-fuel power plants, and other major industrial emitters, as well as from the transportation sector.
“The keys to addressing climate change and the environmental-health crisis in communities of color are fundamentally the same, and we’re pleased that Assemblymember Garcia’s bill recognizes that basic connection,” Vanderwarker said.
Under cap-and-trade, the number of metric tons of carbon-dioxide emissions allowed in the state is capped, and the allowable levels of pollution are steadily reduced, creating an economic incentive for companies to cut emissions Industrial entities then buy and sell pollution “allowances,” which lets pollution increase in one area of the state — often in low income and minority communities — so long as it decreases it somewhere else. California’s version of cap-and-trade also lets companies avoid regional pollution reductions by purchasing a certain number of “offsets” from carbon-saving projects elsewhere in the United States or in Quebec.
But dozens of unregulated toxic chemicals are co-emitted with greenhouse gases, a fact that critics say cap-and-trade fails to address and that perpetuates environmental racism, since most of those living alongside these polluting installations are low-income people of color.
“When an oil refinery wants to expand under cap-and-trade, they buy cheap allowances or offsets from somewhere else, and the people who live in the vicinity get stuck with the pollution,” explained Brent Newell, a staff attorney at the Center on Race, Poverty, & the Environment. “It’s a way of saying to these communities: ‘You have to get in the back of the bus. You have to subsidize these major polluting industries with your lungs.'”
Mari Rose Taruc of Oakland, a longtime director with the Asian Pacific Environmental Network, was part of a broad coalition that opposed cap-and-trade prior to its inception. “Environmental-justice communities do not consent to offsets. And I do not consent for my children’s lungs to be polluted even more so these industries can go buy offset credits somewhere else,” said Taruc, who is raising two children suffering from asthma.
A March study by CEJA found that the leading purchasers of offsets under California’s cap-and-trade program from 2013-14 include several companies that operate in the Bay Area, such as Chevron, Calpine, Shell, and Tesoro. For example, Calpine’s natural gas-fired power plant in Pittsburg has increased its greenhouse-gas emissions by more than 20 percent since 2011, but has used forests in North California and methane digesters on cattle ranches in Indiana to offset pollution increases.
An even more fundamental problem, environmentalists say, is that California’s cap-and-trade program is designed to ensure that it remains cheaper for oil and gas companies to continue burning fossil fuels than it would be to eliminate them.
Cap-and-trade proponents, by contrast, view the program as a balanced way of reducing pollution without unduly harming businesses and consumers. “Cap-and-trade helps ensure that the state and ratepayers don’t bear the costs” of greater expenses to industry, CARB spokesman Dave Clegern wrote in an e-mail. “Businesses also maintain flexibility in how they make actual reductions, which can improve their bottom line and keep the jobs they provide in California.”
Ninawa Huni Kui is a 35-year-old traditional indigenous leader of the Huni Kui people of forest-rich state of Acre in northern Brazil. In a conversation earlier this year via a Portuguese interpreter, his arguments against REDD offsets were reminiscent of California-based environmental-justice advocates that support on-site emissions reductions at polluting facilities rather than cap-and-trade. “Our perception of California is that they are coming here to deal with their own environmental problems, and they should be solving those at home,” Huni Kui said.
According to a 2015 federal-government study, the minimum price for a ton of carbon that would encourage a phase-out of fossil fuels is $37. A study last year by Stanford University’s School of Earth Sciences placed the figure at $220 per ton. Yet the cost under California cap-and-trade has hovered between $11 and $14 per ton. Assemblymember Garcia’s bill features a provision that calls on CARB to consider the full social cost of carbon emissions in future regulatory decisions.
Fossil-fuel industries have offered mixed signals concerning current positions on cap-and-trade. In some situations, they have opposed the program on the grounds that it increases the cost of doing business.
But whenever threatened by more stringent regulations that go beyond cap-and-trade, industry leaders have spoken in favor of the program, with, Western States Petroleum Association president Catherine Reheis-Boyd stating a presentation to New Mexico oil-and-gas producers that her organization favors “a well-designed cap-and-trade program as a feasible and balanced approach to addressing GHG emissions.”
In addition to encouraging at-source emissions reductions, SB 197 would create a Joint Legislative Committee on Climate Change Policies consisting of three members of the Senate and Assembly each, who would provide greater oversight of CARB as part of an effort to increase that board’s transparency and accountability. Environmental justice groups and numerous other environmental groups have often complained about the agency’s lack of responsiveness to their concerns.
These groups have already scored a minor victory amid the uncertainty about cap-and-trade’s future. As the Express reported in January, the state’s leaders have been pushing to become the only jurisdiction in the world that offsets its climate pollution through investments in tropical forest regions in the Southern Hemisphere. The common name for such efforts is REDD.
CARB had planned to have a vote on linking its cap-and-trade program to Acre, Brazil, as early as spring 2017. But the agency issued a draft proposal last week to expand the greenhouse-gas cap-and-trade program beyond 2020, and this proposal does not include an international forest offset provision — a decision that postpones, but does not ultimately rule out, such a move.
Ninawa Huni Kui is a 35-year-old traditional indigenous leader of the Huni Kui people of forest-rich state of Acre in northern Brazil. In a conversation earlier this year via a Portuguese interpreter, his arguments against REDD offsets were reminiscent of California-based environmental-justice advocates that support on-site emissions reductions at polluting facilities rather than cap-and-trade.
“Our perception of California is that they are coming here to deal with their own environmental problems, and they should be solving those at home,” Huni Kui said.
In addition to SB 197, environmental-justice groups are backing Senate Bill 32, introduced by state Sen. Fran Pavley, a Democrat from Los Angeles. This bill would require a 40 percent reduction in greenhouse-gas emissions relative to 1990 levels by 2030. Each of these bills require simple majority votes.
But nothing is ever simple when it comes to emissions-reductions in California.
Law360, New York (July 19, 2016, 9:53 PM ET) California air regulators said last week that the Golden State’s carbon trading program won’t allow companies to buy credits generated from the preservation of Mexican and Brazilian rain forests to offset their emissions, but experts say that idea may end up being part of carbon trading schemes in the future.
Last week, the California Air Resources Board air regulators unveiled a preliminary draft of proposed revisions to the state’s cap and trade program — in which CARB auctions off emissions allowances to refiners, utilities and other greenhouse gas polluters as the emissions cap gradually declines — that would extend the carbon emissions reduction scheme from 2020 to 2030 and envisions steeper annual emissions cuts. A plan to allow the sale of carbon credits earned by foreign governments was not included in the draft, highlighting the difficulties of getting the unorthodox concept off the ground.
Reducing emissions from deforestation and forest degradation, or REDD, programs would work by allowing sub-national entities like Acre state in Brazil or Chiapas state in Mexico to generate carbon offsets by instituting programs that are subject to verification to save their tropical rain forests. The offsets could then be introduced into a cap and trade arrangement like the one in California.
Opponents of the idea include environmental justice and international human rights groups, as well as some environmental groups, that have argued that REDD programs can harm forest communities.
“The communities themselves don’t necessarily always distinguish between a REDD project or one that comes to cut the timber. At the end of the day, people can lose access,” said Gary Hughes, Friends of the Earth’s California advocacy campaigner.
He also said REDD, while potentially saving tropical forests, can simply allow companies in California to continue to pollute as they have in the past, meaning the communities around facilities in the state would see no improvement in their environment as a result of the program.
But Frances Seymour, a senior fellow at the Center for Global Development, a think tank dedicated to reducing global poverty and inequality, said while CARB would certainly consider those concerns, the most likely reason a REDD program was left out of the draft proposal was that the carbon trade program itself is in need of rescuing. She said the California Legislature is currently deciding whether to authorize the 10year extension of the program.
“My understanding was that the goal this time around was to get the whole capandtrade system extended past 2020 to get past the Legislature. If there were bells and whistles that could be taken off to facilitate that in this round, that’s what CARB wanted to do,” she said. “But REDD is by no means dead. This is just a delay.”
The draft proposal said linkage with a state of the art, jurisdictional sector based offset program can provide “significant benefits” to California’s cap and trade
program by assuring an adequate supply of compliance offsets to keep the cost of compliance within reasonable bounds.
Linkage would also support California’s broad climate goals, as well as global biodiversity and tropical forest communities, CARB said. The agency said it will begin a new series of public meetings about REDD this fall.
Kevin Poloncarz, a partner at Paul Hastings LLP, said CARB has been working on a REDD program for years and that there is a lot of momentum to do it.
“I didn’t get a sense that this was slamming on the brakes,” he said of the draft proposal. Instead, he said the delay suggests California wants more time to coordinate with the governors of Quebec, which is already linked to California’s system, on what an appropriate sector based linkage would look like.
Another reason CARB may not want to start up a REDD program right away is that it may not be economically necessary right now, said Michael Wara, a professor at Stanford Law School. He noted that recent sales of allowances, or permits to pollute, have actually failed to generate healthy market activity.
“CARB really wants to create confidence in the market that there’s going to be a use for these allowances after 2020 as the caps fall. Right now, there’s real uncertainty about whether the program’s even going to exist after 2020. That question mark has reduced demand for allowances,” Wara said.
Offsets, like the ones that would come from a sector-based program in Acre or Chiapas to reduce emissions from deforestation, are like additional supply, he said, so CARB is now trying to create a belief among market participants that there’s going to be additional demand.
“They don’t want to create the belief that there’s going to be additional supply because that might reduce how many allowances they sell, and they desperately want to sell their allowances right now to restore the confidence — especially in the California Legislature — in the program,” he said.
He said it’s more likely that a REDD program will take off when CARB and the market have a firmer belief there are too many allowances and not enough emissions.
“They’ve been working on REDD for a really long time, and I think that they’re committed to it, but they’re fighting for their life right now,” Wara said. “So this has to be on the back burner because it’s a distraction from whether there’s a cap and trade program at all.”
The United Nations’ disastrous REDD+ offset program has hit the ground internationally. Its potential adoption by the California Air Resources Board will only make things worse.
Luan F. Makes Marks, Ph.D.
The Basics
Some state, national, and international governments, such as the State of California, limit pollutants and/or greenhouse-gas (GHG) emissions. Some governments also sell or allocate permits or allowances to emitting companies to help in compliance with those limits.
Permits allow an emitter who holds them permission to discharge a specific quantity of emissions within a period of time. These emissions permits can be bought and sold. In addition, offset projects that provide quantifiable emissions reductions may be developed for credits to offset emissions. These offset credits can also be bought and sold. The buying and selling of permits and offset credits are part of international emissions trade in these and similar commodities.
The State of California’s Air Resources Board (CARB) has developed various programs, called offset project protocols, to govern certain areas of potential GHG emissions reductions and the development of emissions offset projects. One particular area for offset projects is forestry, as living forests store carbon dioxide, a greenhouse gas, and their destruction releases it into the atmosphere.
The United Nations has also developed a forestry carbon offset program, REDD, now REDD+ (Reducing Emissions from Deforestation and Forest Degradation). CARB has considered the adoption of REDD+ carbon offset project credits for approval under California’s cap-and-trade program, allowing international forestry carbon offsets to be used and traded by California emitters in compensation for their emissions.
The Seeds of Emissions Trade and Ecosystem Commodities
The vaunted promises of environmental salvation and new profits from the development and trading of offset permits and credits has spurred on, and been spurred on by, an immense new industry of insiders, corporate investors, environmental nonprofits, national and international government officials, and the emitting industries themselves.
Despite the financial softness of the carbon markets, carbon offsets, whether voluntary and mandatory, have become trading commodities that elicit huge investments, with the potential for gains and losses internationally. Its drivers are concerns for a changing climate as well as development opportunities and market returns. Now the influential CARB is set to adopt REDD+, which will further spread its flawed protocols.
The idea of emissions trading as a market-based incentive to control pollution first sprouted from the seeds of speculative theories, in 1966 by American economist Thomas D. Crocker and in 1968 by the Canadian economist John H. Dales.[1] Over the next five decades, these theories would be cultivated by Ronald Reagan, George Bush Sr., Bill Clinton, and California governors Arnold Schwarzenegger and Jerry Brown.
In the decades since then, emissions trading has grown into a pollution-control mechanism in the United States. Twenty years ago, carbon emissions trading was incorporated into the Kyoto Protocol. REDD and its rebrand, REDD+, were initially cultivated at the international level through the United Nations as a market-driven mechanism to preserve, protect, and enhance the capacity of forests to sequester carbon. In actuality, “[t]he offset mechanism allowed an industrialized country or company in these countries to emit more CO2 than the Kyoto Protocol permitted.”[2]
Global carbon trading is slated to become a massive commodity market. A particular focus has been on the remaining tropical rainforests. But the burgeoning financialization of nature has expanded to include derivatives and futures of the entire commodity supply chain of ecosystem services. The Green Economy claims to salvage both the planet and capitalism’s claims of dwindling supplies of investments: “The [United Nations Environmental Programme], the World Business Council for Sustainable Development, the World Bank and others . . . say that ‘green growth’ will address these multiple crises in one sweep.’”[3]
But the air we breathe, the water we drink, could have a value, be commodified, sold, and traded, while greenhouse gas emissions, development, and resource extraction continue relatively unabated: “Ecosystem service markets offer this permission [to pollute and destroy] in the form of offset credits.’”[4] This market may come to control the fabric of our lives at a profound cost.
REDD+ Victims
As the UN’s REDD/REDD+ became global policy, it was widely reported that the development and trading of international forest offset projects are infested with problems, including: no real progress in carbon sequestration; amplified resource extraction, development, and pollution; rampant carbon speculation; pervasive land grabs; endemic corruption; and extreme violation of rights, including forced removal of indigenous populations from their traditional lands, the reduction of their territories and territorial tenures, and violence.
REDD+’s victims have ranged from individuals to many governments and industries, all investing heavily in the idea that forest offset projects will somehow buffer lifestyle transgressions and fix the Earth’s atmosphere. But its biggest victims are the indigenous peoples who are traditional caretakers of the many forested lands now under siege. They are losing their homes, land rights, livelihoods, and lives. Their land tenure and rights are eroding whether through legislation, court decisions, government treaties, contracts and leases for resource extraction, seizures, and illegal occupancies, because those lands now offer speculative value as eco-resources. The promise of immense capital put into forest carbon project development has not trickled down significantly to indigenous peoples.
This is massive neocolonialization on the suddenly valued carbon frontier.
Other new epithets have grown up alongside carbon offset and REDD+ developments to articulate their negative reputations.
Carbon cowboy denotes a breed of con-artist speculator descending on indigenous peoples to quickly close fraudulent deals for land rights in indigenous communities.
Carbon violence was coined “to give context to the diversity of structural, social, political, economic, and cultural harms connected with the way carbon markets have evolved, and explores green resources’ role in the carbon violence experienced by the villagers and the local ecosystems they inhabit.”[5]
Carbon chaos aptly describes the worldwide disruptions of lives, communities, lands, governments, industries, and the markets through carbon trading and offset projects.
Nothing to Count On
Despite the many substantive critiques against emissions trading, carbon offset projects, REDD+, and the financialization of nature, the industry has continued unchecked, impelled by monied interests. REDD+ and the rest have become firmly entrenched for speculative profit, even though they are touted as a solution to climate change. The “solution” is false and empty; emissions trading and offsets fail to address the stated problem of carbon build-up in the planet’s atmosphere, while at the same time causing substantial harms.
Major criticisms are that such trading is fundamentally fraudulent, as a free-market mechanism developed under corporate, neoconservative/neoliberal agendas to serve a for-profit speculation in developing and non-developed communities at the expense of the environment. Emissions trading theory has been implemented without solid proof of efficacy, and it is currently failing to produce expected results. It is not leading to conservation of resources, but to extensive development, resource extraction, and concentration of wealth.
Global emissions trading and projects may represent environmental strangulation for the Earth, as more sustainable and effective solutions have been ignored and dismissed. Caught up by that web, indigenous peoples and environmentalist allies have risen in resistance internationally to mount their own critiques of social and environmental injustice.
Economist Thomas D. Crocker, who originally developed the theory of tradable emissions permits as a University of Wisconsin graduate student in 1966, indicated his own doubts in 2009 as retired academic, “‘I’m skeptical that cap-and-trade is the most effective way to go about regulating carbon,’ . . . He says he prefers an outright tax on emissions because it would be easier to enforce and provide needed flexibility to deal with the problem”:[6]
Mr. Crocker sees two modern-day problems in using a cap-and-trade system to address the global greenhouse-gas issue. The first is that carbon emissions are a global problem with myriad sources. Cap-and-trade, he says, is better suited for discrete, local pollution problems. “It is not clear to me how you would enforce a permit system internationally,” he says. “There are no institutions right now that have that power” . . .
The other problem . . . is that quantifying the economic damage of climate change—from floods to failing crops—is fraught with uncertainty.[7]
The other originator of emissions trading, John Dales, “was also a skeptic of using the idea to tame global warming.” “‘It isn’t a cure-all for everything . . . There are lots of situations that don’t apply.’”[8]
Carbon Emissions Accounting: Flawed and Fraud
Carbon emissions, carbon offset projects, REDD+ and the resulting schemes to commodify nature defy accurate accounting. There are inherent problems with attempting to measure and decide the many intangible facets of such enterprises, including the costs and damages of climate change and carbon offset project baselines, additionality, and leakage.
The difficulty of measuring the entire range, from atmospheric CO2 levels to emissions trading to financialization of nature, leads one to conclude that the project is like measuring the proverbial emperor’s new clothes.
Yet flawed carbon accounting has become institutionalized, per the following from wikipedia.org:[9]
Ingmar Lippert, in his Enacting Environments, cited above, “establishes how carbon emission facts are produced and co-configure climate change realities.” Such facts are constructed “to stage the company, and in consequence capitalism, as in control over its relations to an antecedent environment.”[15]
Developing greenhouse gases and other ecosystem metrics and accounting has been deemed by many critics as an impossible task. Consider these further expert evaluations of the system:
A case in point is the continuing attempt . . . in various countries to tackle the riddle of “additionality” in offset markets (that is, how to prove that a project goes beyond business as usual), to which, as carbon trader Mark Trexler noted years ago, there is no correct answer. Constantly manufacturing and reaffirming the notion that offset projects’ shortcomings are due either to imperfect methodology or incorrect implementation, ten years of regulatory effort have only further skewed the political economy of the offset markets . . . in favour of corporations locked into fossil fuel use, since it is only they who have the resources necessary for navigating the regulatory mazes that the additionality debate has made ever more intricate. Ironically, of course, this is an effect which, logically speaking, should itself enter into calculations of carbon saved and lost . . . The recent establishment of a private carbon rating agency, as well as proposals for “programmatic” and “sectoral” carbon credits, which would help sidestep impossible “additionality” requirements, reflect a continuing commitment to “better calculation” in the face of irresolvable tensions between the needs for high-volume, predictable carbon credit output and for market credibility;[16]
And:
The calculation of the number of offsets generated by a project is inherently problematic. The key difficulty lies in the need to compare the projects’ actual emissions to a counterfactual scenario reflecting another reality, one in which the activity is not implemented as an offset project. This scenario is referred to as the “baseline” scenario, and the number of generated credits is equal to the difference between emissions in the baseline scenario and emissions resulting from the project. There is no fail-safe way to divine what the baseline scenario would be. Various methodologies, protocols, and rules-of-thumb can be devised but ultimately the scenario cannot be known with certainty;[17]
And:
[T]he damage caused to the global environment by each incremental emission of CO2 is very small and perhaps unknowable, making it very hard to put an accurate price on emissions.[18]
Carbon emissions accounting fraud has now entered the language of the accounting field.[19] It is an acknowledged problem that carbon fraud exists in carbon accounting. Even saying that there is an accurate and overarching carbon accounting standard for the industry is so untrue that it could be considered a form of fraud.
Analyst Chris Lang indicates the conflicts of interest and potential for fraud that are inherent in the industry in establishing carbon project metrics:
Clearly, it is in the REDD project developers’ interest to have a baseline that predicts a high rate of deforestation in the project area. The higher the rate of deforestation in the baseline scenario the more carbon credits will be generated. And the less the project will have to reduce deforestation.
Of course REDD project developers can’t pick their own baselines and hope that the rest of the world believes they are not just making things up. The methodology proposed by the project developers has to be validated and project has to be audited. This is where voluntary certification schemes come in, like the Verified Carbon Standard, Plan Vivo, CarbonFix Standard, and so on.
But there’s a catch. The voluntary certification schemes make their money from generating carbon credits. The more carbon credits generated, the more money they make.
And the validators and auditors that are accredited by the certification scheme are paid directly by the project developers. In order not to lose future work opportunities, auditors are unlikely to be too picky about approving their clients’ methodologies.
This is a blatant conflict of interest at the heart of the REDD mechanism.[20]
Lang also addresses the fraudulent natures of baseline metrics:
Baselines allow project developers to put an exact figure on the number of tonnes of carbon that have not been emitted as a result of their project. But this number is based on a fiction.
There is no way of testing whether a baseline scenario is true or not, because it is something that might have happened had the REDD project not gone ahead. As the authors conclude, “the baseline scenarios in REDD+ projects amount to untestable guesses”. . .
Fraud would be a better way of describing what REDD project developers are doing when they set bogus baselines. The voluntary certification systems, such as [Verified Carbon Standard], are complicit in this fraud.[21]
Seyller et als., in their study of REDD+ projects, concluded that these projects “resemble ‘virtual emission reduction machines’ designed to inflate the production of carbon credits and that they do not structurally change the local economy characteristics which drive deforestation.”[22]
The Gaming of Carbon Accounting
Despite negative critiques, individuals and organizations have continued to influence the establishment of standards for carbon accounting. Many have an inside track and may stand to profit or lose from future resolution of the current metric challenges. Indeed, we all may stand to profit or lose from it, since it is currently deemed pivotal to the issue of climate change.
It is not a simple or easy issue to resolve: “Accountancy can be a way of making things appear uncontroversial and non-political, but the technical debates about accountancy rules and standards sometimes involve intense power struggles.”[23]
Multiple, diverse offset standards (or protocols) now exist internationally:
Offset protocols for a wide variety of project types abound. These protocols have been developed for offsets in voluntary carbon markets and the few mandatory carbon markets that exist, including under the Kyoto Protocol/United Nations Framework Convention on Climate Change (UNFCCC). Protocols developed for use in the UNFCCC regime are by far the most numerous. [24]
The California Air Resources Board (CARB) has established protocols and approved other organizations’ standards to govern development and operation of CARB offset projects.
The REDD+ program has been under consideration by CARB for a number of years, with opposition reported from environmental and social justice organizations, including CARB’s own Environmental Justice Advisory Committee (EJAC). EJAC’s initial draft recommendation was to not include REDD in CARB’s Scoping Plan update.[25]
Their final recommendation was:
ARB should minimize carbon offsets, and prevent use of international forestry offsets such as REDD, that could diminish direct emission reductions in disadvantaged communities in California and compromise [greenhouse gas (GHG)] reductions in-state. Any offsets used need to have accompanying data that verifies GHG reduction and that it is additional to business as usual.[26]
The EJAC’s request for data verifying greenhouse gas reduction and additionality is referential to some of the same, extant carbon accounting problems that remain unaddressed.
Next Nexus for Metrics
There has been a drive within the carbon industry since 2009 to provide a global, standardized carbon accounting system, based upon satellite monitoring and shared software. This drive has been spearheaded by Dr. D. James Baker, Director of the Forest and Land-Use Measurement Program of the Bill, Hillary & Chelsea Clinton Foundation. Since at least 2007, Baker has held multiple titles in various metamorphoses of the Clinton Foundation’s programs, including the Global Carbon Measurement Program, Clinton Climate Initiative—Carbon and Poverty Reduction Program, Carbon Measurement Collaborative, and the Clinton Climate Institute.
Among his other achievements, Baker was appointed Under Secretary of Commerce and Administrator of the National Oceanic and Atmospheric Administration in 1993 by Bill Clinton, serving in that capacity until 2001: “as the longest-serving official in that position, he significantly influenced U. S. climate and ocean policy.”[27] During his term of office, “he guided the completion of the modernization of the National Weather Service, initiated new climate forecasting services, and merged civil and military environmental satellite systems.”[28]
Baker was pivotal in the rise of global warming and climate change discourse. In 2013, he was a member of the Technical Advisory Panel for the World Bank’s Forest Carbon Partnership Facility.[29] He has been a long-time advisor to Vice-President Al Gore.[30]
In the course of his career, Dr. Baker has lamented the difficulties of accurate metrics and pointed to the need to maintain
long term observations for the understanding and prediction of ocean and climate change. These observations have to be globally distributed and carried out over long periods of time. But a means of obtaining these observations . . . is not in place today. There is no global system of routinely funded long-term, high quality measurements to provide the necessary understanding of climate in general . . . Long term biological measurements are in an even more limited state of development.[31]
He has continued his interest in promoting observation and measurement through the Clinton Climate Initiative, which “helps countries comply with international measurement and reporting verification (MRV) standards, building a credible database on which to advance international agreements on deforestation.”[32]
As of January 2016, the “Clinton Climate Initiative [is] leading institutional arrangements”[33] in the anticipated development of second generation carbon estimating and reporting tools,” to be delivered and governed through a dedicated foundation, Moja Global:
A new second-generation integrating framework is under development that can greatly reduce duplication of future efforts by providing a generic platform that works with existing or new modules developed to address national circumstances. [34]
It remains to be seen what will develop out of the Moja Global foundation platform framework. After seven years of attempts to resolve accounting issues, the next generation has not yet been delivered.
Analysis
The promotion of these new measurement tools cannot be allowed to eclipse the issues that have haunted REDD+ and other emissions offset-project developments. The very basis of emissions trading projects—measurement—is error prone no matter how the accounting system performs. There are irresolvable structural issues such as additionality, leakage, permanence, enforceability, verifiability, and validation. Systemic fraud and carbon violence against indigenous peoples will not go away under the REDD+ and other trading regimes.
Fraud also exists in the underlying premise that the free market can best resolve climate change crises, even those that were caused by the free market. It is extant in the basic premise that financial incentives will stop pollution better than consumer reductions, legislative restrictions, and tax increases. It is found when initial logging of forests to lower initial project baselines is preferable to leaving forests ecosystems and their indigenous caretakers alone and fossil fuels in the ground. It continues in the premise that the global market needs emissions trading and the financialization of nature as investment commodities to prevent economic collapse.
Emissions metrics and the emissions trading markets are fatally, systemically flawed and fraudulent, in theory and in practice. The international REDD+ and other offset projects are creating carbon violence and chaos. It is time for the California Air Resources Board to weed out REDD+ and carbon offsets permanently and to rectify the damages of carbon trading.
[5] Frédéric Mousseau and Shannon Biggs, “The Darker Side of Green: Plantation Forestry and Carbon Violence in Uganda: The Case of Green Resources’ Forestry-Based Carbon Markets,” (Oakland, CA: The Oakland Institute, 2014), 3, www.oaklandinstitute.org/sites/oaklandinstitute.org/files/Report_DarkerSideofGreen_hirez.pdf.
[10] Larry Lohmann, “Toward a Different Debate in Environmental Accounting: The Cases of Carbon and Cost–Benefit,” Accounting, Organizations and Society 34 (April 2009): 499–534.
[11] D. MacKenzie, “Making Things the Same: Gases, Emission Rights and the Politics of Carbon Markets,” Accounting, Organizations and Society 34 (April 2009): 440–455.
[12] Ingmar Lippert, “Extended Carbon Cognition as a Machine,” Computational Culture 1 (2011), computationalculture.net/article/extended-carbon-cognition; Ingmar Lippert, “Carbon Classified? Unpacking Heterogeneous Relations Inscribed into Corporate Carbon Emissions,” Ephemera 12 (2012): 138–161.
[13] Ingmar Lippert, “Enacting Environments: An Ethnography of the Digitalisation and Naturalisation of Emissions” (Ph. D. dissertation, University of Augsburg, 2013).
[14] Frances Bowen and Bettina Wittneben, “Carbon Accounting: Negotiating Accuracy, Consistency and Certainty across Organisational Fields,” Accounting, Auditing & Accountability Journal 24, no. 8 (2011): 1022–1036.
[15] Ingmar Lippert, “Enacting Environments: An Ethnography of the Digitalisation and Naturalisation of Emissions” (Ph. D. dissertation, University of Augsburg, 2013).
[16] Larry Lohman, “Neoliberalism and the Calculable World: The Rise of Carbon Trading.” In Kean Birch and Vlad Mykhnenko, eds., The Rise and Fall of Neoliberalism: The Collapse of an Economic Order? (London: Zed Books Ltd., 2010), www.thecornerhouse.org.uk/sites/thecornerhouse.org.uk/files/Neolib&Calc.pdf, 9, citing Mark Trexler, “A Statistically Driven Approach to Offset-Based GHG Additionality Determinations: What Can We Learn?” Sustainable Development, Law and Policy 6, no. 2 (January 2006).
[19] Shamima Haque and Muhammad Azizul Islam, “Carbon Emission Accounting Fraud,” in Corporate Carbon and Climate Accounting, ed. Stefan Schaltegger, Dimitar Zvezdov, Igor Alvarez Etxeberria, Maria Csutora, and Edeltraud Günther (Switzerland: Springer International Publishing, 2015), 243-257, papers.ssrn.com/sol3/papers.cfm?abstract_id=2771580.
[20] Chris Lang, “The Virtual Economy of REDD: Conflicts of Interest, Hot Air, and Dodgy Baselines,” (2 June 2016), www.redd-monitor.org/2016/06/02/the-virtual-economy-of-redd-conflicts-of-interest-hot-air-and-dodgy-baselines/.
[22] C. Seyller, S. Desbureaux, S. Ongolo, A. Karsenty, G. Simonet, J. Faure, and L. Brimont, “The ‘Virtual Economy’ of REDD+ Projects: Does Private Certification of REDD+ Projects Ensure Their Environmental Integrity?” International Forestry Review, 18, 2 (2016).
[23] Heather Lovell, Thereza Sales de Aguiar, Jan Bebbington, and Carlos Larrinage-Gonzalez, “Accounting for Carbon,” Research Report 122, Certified Accountants Educational Trust for the Association of Chartered Certified Accountants, in partnership with International Emissions Trading Association (London, 2010), www.accaglobal.com/content/dam/acca/global/PDF-technical/environmental-publications/rr-122-001.pdf.
[28] Committee on Assessment of Impediments to Interagency Cooperation on Space and Earth Science Missions, Space Studies Board, Division on Engineering and Physical Sciences, National Research Council, Assessments of Impediments to Interagency Collaboration on Space and Earth Science Missions, National Academies Press, 2011, 62.
[33] Werner A. Kurz, “Introduction to the Use of Carbon Accounting Models and How They Could Be Used to Determine a Reference Emissions Level,” at BioCarbon Fund Initiative for Sustainable Forest Landscapes Workshop to Discuss Landscape-Level Carbon Accounting Approaches (Washington, D. C., 2016), 29.
Yesterday, California’s Air Resources Board released a preliminary draft of proposed amendments to its Global Warming Solutions Act (AB 32) aimed at extending the cap and trade scheme beyond 2020. The big news for REDD watchers is that the ARB’s preliminary draft excludes making a decision on whether to allow REDD credits in California’s cap and trade scheme.
Tucked away on page 22 of the The 443-page preliminary draft is the following:
ARB staff is not proposing any regulatory amendments related to sector-based offset crediting or tropical forests in this rulemaking; rather, ARB staff anticipates that ongoing discussions with stakeholders will resume with additional informal public meetings outside of this rulemaking starting in the fall of 2016.
REDD, then, is being given a decision-making process outside the rulemaking process outlined in ARB’s preliminary draft. The REDD process will “resume” in Autumn 2016.
The rulemaking process
The process for the rulemaking (not including REDD) is as follows. On 19 July 2016, the Air Resources Board will present the preliminary draft to the Office of Administrative Law, which will conduct a review of the draft.
The Air Resources Board may revise the draft based on the Office of Administrative Law’s review. On 2 August 2016, the Air Resources Board will post the revised version of the draft on its website.
A formal public comment period will then run from 5 August to 19 September 2016.
On 22-23 September 2016, the Air Resources Board will hold a hearing to discuss the proposed amendments. A second hearing to vote on the proposed amendments will take place on 23-24 March 2017.
The REDD process
Here are the two paragraphs relevant to the decision about REDD in California:
4. Linkage with External Greenhouse Gas Emissions Trading Systems and Programs
… b. Other Linkages and Linkage-Related Partnerships
Sector-Based Crediting Programs, including Acre, Brazil
As described in Chapter I of this Staff Report, ARB held public workshops on a number of topics that helped inform the amendments contained in this proposal. Four of those workshops addressed the potential of approving the use of sector-based offset credits from the tropical forestry sector within the Cap-and-Trade Program by developing a set of regulatory standards against which potential partner jurisdictions’ tropical forestry programs would be assessed for linkage. More information on these workshops is presented in Chapter IX and Appendix F of this Staff Report. ARB staff identified the jurisdictional program in Acre, Brazil as a program that is ready to be considered for linkage with California. ARB staff received numerous informal comments following the workshops. Some comments suggested specific recommended approaches, some opposed any action, some supported ARB staff’s initial thinking as outlined in an October 19, 2015 staff paper and as described in the four workshops, and some recommended that staff conduct additional stakeholder engagement before proposing any regulatory amendments.
ARB staff has presented information about how linkage with a state-of-the-art, jurisdictional sector-based offset program can provide significant benefits to California’s Cap-and-Trade Program by assuring an adequate supply of high-quality compliance offsets to keep the cost of compliance within reasonable bounds, up to the quantitative usage limit for sector-based offsets. Linkage would also support California’s broad climate goals, as well as global biodiversity and tropical forest communities. (ARB 2015a) After reviewing the workshop results, and in order to ensure coordination with Québec and Ontario, ARB staff is proposing to continue discussing with stakeholders and partner jurisdictions, including Acre and others in the Governors’ Climate and Forests Task Force, on the regulatory path to optimize the multiple benefits of including sector-based offsets in California’s program, including through a linkage with Acre, in time to be used to meet compliance obligations incurred in the third compliance period and thereafter. ARB staff is not proposing any regulatory amendments related to sector-based offset crediting or tropical forests in this rulemaking; rather, ARB staff anticipates that ongoing discussions with stakeholders will resume with additional informal public meetings outside of this rulemaking starting in the fall of 2016. These meetings will also solicit and consider additional tools the State of California could employ to mitigate tropical deforestation, including measures to encourage sustainable supply chain efforts by public and private entities.
So discussions on REDD in California will re-start in Autumn 2016, separate from the rulemaking process outlined above.
The bias in the second paragraph is blatant. As is the bias in the White Paper on REDD that the Air Resources Board produced in October 2015.
The ARB makes no mention in this second paragraph of the problems associated with REDD, just the “significant benefits” to California’s cap and trade scheme of providing cheap carbon credits.
According to the ARB, REDD would support California’s climate goals. Of course the ARB doesn’t mention the awkward fact that carbon trading does not reduce emissions. For every REDD credit sold from Brazil, an additional tonne of CO2 would be emitted in California.
The ARB does not mention the low-income communities and communities of colour in California who are opposed to letting polluting industry continue to poison their air.
Kicking the REDD can down the road
Nevertheless, ARB staff are not proposing making a decision on including REDD in this preliminary draft. Instead ARB proposes discussions with “stakeholders and partner jurisdictions”,
on the regulatory path to optimize the multiple benefits of including sector-based offsets in California’s program, including through a linkage with Acre, in time to be used to meet compliance obligations incurred in the third compliance period and thereafter.
The third compliance period runs from 2018 to 2020.
One possible reason for the ARB’s decision to delay a decision on REDD is to try to avoid additional controversy. The most recent auction sold only 10% of the allowances put up for sale. The cap and trade scheme faces a lawsuit from the Chamber of Commerce that argues that allowance auctions function as a tax – an unconstitutional tax since it was introduced without the two-thirds majority in the Legislature that is required for new taxes.
Brown in talks with big oil
Meanwhile, oil industry leaders are talking to California Governor Jerry Brown’s administration. The purpose of the talks, according to Catherine Reheis-Boyd, the President of the Western States Petroleum Association, is “to improve the state’s current climate change programs.” WSPA has spent US$12.8 million on lobbying in the 2015-2016 legislative period, making it the top spending lobby group in California.
Underneath California’s reputation as a “green leader” is a dark and oily reality—the state is the third largest petroleum producer in the nation, and the oil industry is California’s largest and most powerful political lobby.
No wonder Brown’s administration is so keen on REDD and carbon trading.
At a recent workshop in Sacramento, Environmental Defense Fund’s Steve Schwartzman was waving around copies of a letter in favour of California using REDD offsets in its cap and trade scheme. Following the letter was a list of NGO logos, including that of Greenpeace Brazil. But Greenpeace has consistently opposed REDD offsets in California. How did Greenpeace’s logo appear on a letter supporting REDD?
California’s Air Resources Board is currently considering whether to include REDD offsets in its cap and trade scheme (AB 32). The ARB is holding a series of technical workshops about this proposal, one of which took place in Sacramento on 28 April 2016.
The day before the workshop, Carlos Rittl, Executive Secretary of the Climate Observatory, a coalition of 40 NGOs in Brazil, sent a letter to California’s Governor, Jerry Brown. The letter was in support of California including REDD in AB 32:
We write to express the support of the Brazilian Climate Observatory to the State of California for its significant efforts to reduce their greenhouse gas emissions domestically, and also for considering the importance of tropical forest conservation and the involvement of local communities in these efforts.
A day after the workshop in Sacramento, Steve Schwartzman, Senior Director of tropical forest policy at the Environmental Defense Fund referred to the letter in a tweet:
The link in Schwartzman’s tweet is to the letter from Carlos Rittl, posted on EDF’s website.
Manufacturing consent
For the meeting in Sacramento, Schwartzman printed out copies of the letter. Schwartzman’s version of the letter was the same as that on EDF’s website, but with one very important difference. Schwartzman had added several pages to the letter, featuring the logos of the member organisations of Climate Observatory – including Greenpeace Brazil.
A few days later, Jonah Busch at the Center for Global Development, tweeted about Schwartzman’s version of the letter:
A colleague sent REDD-Monitor a link to Busch’s tweet, with the following comment:
“I have to admit that I’m more than average surprised that Greenpeace supports to include REDD+ as an offset mechanism in California.”
So I asked Greenpeace about this. And Greenpeace asked Climate Observatory. Very soon, a clarification letter appeared from Carlos Rittl. It turns out that the original letter to California’s Governor Brown was signed by Rittl only. It was a “network-led initiative that contains its single signature”.
Rittl’s explanatory letter is posted below. Busch, at least, tweeted Rittl’s clarification.
Schwartzman didn’t bother.
To whom it may concern.
The Brazilian Climate Observatory (OC) is a network comprising a broad spectrum of Brazilian civil society organizations. OC’s positions and recommendations on any issue are developed after consultation processes among its members aiming to reach consensus.
OC’s position about any given issue represents the average views of its members, and does not necessarily correspond to any individual organizations’ views or positions on the same specific subject.
OC has recently submitted a letter to the Honorable Governor of California, Mr. Jerry Brown, expressing its support for the inclusion of REDD+ activities on the States’ AB32 program. That letter was a network-led initiative that contains its single signature.
It has come to our attention that third parties have shared that letter with stakeholders from different groups in the United States alongside a list of OC members, without previous consent of any or all network members. Unfortunately, that could have been mistakenly understood as a list of associated signatures to the letter from each individual OC member. That was not the case. The referred members list does not represent a list of additional signatures to the letter.
Greenpeace Brazil is one of OC members. Its well-known public positions, as well as the positions Greenpeace International, Greenpeace US or any other Greenpeace national organization, have not changed and do not endorse the inclusion of REDD+ activities in any offset mechanism or legislation worldwide. However, during the Climate Observatory internal consultation process, Greenpeace Brazil has kindly not expressed its opposition to the OC letter to the Governor of California as a matter of respect to the views of some other members.
In last few days, external stakeholders have approached Greenpeace USA about the issue with questions related to its positions on the subject of the letter. Therefore, I hereby certify what has been already stated above. The letter to Governor of California expresses the average views of OC members for its own position on the issue only. It was not signed by OC individual members and do not necessarily expresses the position of each network’s member organizations.
In July 2017, California voted to extend its cap-and-trade scheme until 2030. Some environmental groups and the oil and gas industry support the legislation. Environmental justice groups oppose it. This post summarises some of the responses to the continuation of cap-and-trade in California.
