California’s cap and trade program bets on REDD projects

State regulators affirmed this week that REDD credits are still on the radar of California’s cap-and-trade program, despite the fact that some actors had reservations about that.

In February 2013, State Senator Ricardo Lara introduced Senate Bill 605, a proposal that would have limited offsets to anywhere in the US and possibly within the Western Climate Initiative. The bill did not pass the California Assembly before the end of last year’s legislative session, but could be reconsidered in its new form this year and remains a threat to the role of international offsets in California’s program.

But the California Air Resources Board (ARB), the agency charged with overseeing the cap-and-trade program, appears to be committed to considering the offsets in spite of that political opposition. The agency still views international offsets as potentially playing a role in the program and will continue considering them. “As the cap-and-trade program continues to help achieve our long-term climate goals, it will be increasingly important to bolster the offset program,” the ARB said in the document.

The ARB specifically mentioned the REDD placeholder featured in the cap-and-trade regulations. The agency also cited the safeguards recommended by the REDD Offsets Working (ROW) Group, which limit accepted offsets to those from jurisdictional REDD+ programs. ROW released its technical and policy recommendations to California and Acre, Brazil and Chiapas, Mexico, the US state’s partners in a memorandum of understanding, in July 2013.

Also it is important to remind that California’s Global Warming Solutions Act of 2006 (AB 32) sets a goal of reducing state-wide GHG emissions to 1990 levels by 2020 and reducing emissions 80% below 1990 levels by 2050. The proposed update recognizes that the US state must continue to lead at the international level by planning for emissions reductions after 2020.

“The proposed update identifies international sectoral offsets, such as REDD, as a potential key opportunity for California to help curb deforestation, the cause of roughly 15% of the world’s greenhouse gas emissions, while efficiently meeting the state’s domestic emission reduction targets,” said Erica Morehouse, an Environmental Defense Fund attorney. “The state’s engagement on REDD, along with the ongoing collaborations with China, Mexico, and other U.S. states, is a building block of meaningful global climate leadership.”

Companies that must reduce their emissions under California’s cap-and-trade system may use offsets for up to 8% of their compliance obligations.  California’s program already allows offsets from domestic forestry, urban forestry, livestock and ozone-depleting substances (ODS) projects.