California Association of Sanitation Agencies
Cap and Trade
The California Air Resources Board (CARB) adopted the California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms, otherwise known as “cap and trade” at its December 16, 2010 meeting. Cap and trade is a market-based regulatory framework in which regulated entities can trade “allowances” for their CO2 emissions. Adoption of this regulation is part of the state’s implementation of AB 32 - The Global Warming Solutions Act of 2006. The cap and trade program is scheduled to begin implementation in 2013.
While there is no specific exemption for wastewater agencies, CASA and its California Wastewater Climate Change Group (CWCCG) partners successfully worked with CARB staff to ensure that no wastewater agencies in California trigger into the cap. Wastewater agencies will not have a compliance obligation because emissions from combustion of biomass do not count toward the emissions threshold. This means that emissions associated with burning landfill or digester gas are excluded, and there are currently no wastewater agencies in California that emit more than the 25,000 metric tons/year threshold based on fossil fuel combustion alone.
Because wastewater agencies are outside of the cap, they may have the opportunity to sell carbon offsets to capped entities. Offsets are emissions reductions resulting from projects undertaken by entities that are not subject to cap and trade compliance obligations. CWCCG is working with staff at CARB as well as non-profit organizations such as the Climate Action Reserve to explore development of offset protocols for use by wastewater agencies.