California Global Warming Solutions Act of 2006: offset credits.
Impact
Under current law, until January 1, 2031, entities obligated to meet greenhouse gas emission reduction targets can include up to half of their compliance obligation by surrendering offset credits. These credits may come from projects that do not necessarily provide direct environmental benefits within California. AB 2862 expresses the Legislature's intention to introduce legislation in the future that would limit the application of these offset credits, thus potentially tightening regulations governing how entities can achieve compliance and emphasizing the importance of local environmental benefits.
Summary
AB 2862, introduced by Assembly Member Muratsuchi, aims to amend provisions within the California Global Warming Solutions Act of 2006, particularly concerning the use of offset credits. The California Global Warming Solutions Act charges the State Air Resources Board with monitoring and regulating greenhouse gas emissions to achieve a target of reducing emissions to at least 40% below the 1990 levels by the year 2030. This framework allows the board to employ market-based mechanisms for compliance, where regulated entities can use offset credits to meet their obligations.
Contention
The discussions surrounding AB 2862 indicate a notable contention regarding the implications of limiting offset credits. Advocates of the bill stress the need for tighter regulations to ensure that compliance mechanisms do not undermine local environmental standards. However, some industry representatives argue that restricting the use of offset credits could impose considerable burdens on businesses seeking to comply with emissions regulations, potentially leading to increased costs and impacting California’s economic landscape.