California’s Approved AB32 Scoping Plan Retains Value of the Voluntary Renewable Energy Market
Center for Resource Solutions applauds decision to give voluntary market purchases full environmental value under cap and trade regime
CRS Communications Director
San Francisco CA (December 12, 2008) — By giving voluntary renewable energy generation the power to reduce the levels of greenhouse gas (GHG) emissions allowed under AB32, state air regulators in California Thursday allowed individuals and businesses to be full partners in reducing impacts on the environment under sweeping new regulations to combat climate change.
The Center for Resource Solutions (CRS) applauds the California Air Resources Board (CARB) for keeping renewable energy as a priority in the upcoming regime. This inclusion allows consumers and businesses to retain the full environmental benefit of their renewable energy purchases under the “cap-and-trade” program that will guide GHG reductions in the state.
The landmark Scoping Plan, approved Thursday by the board, outlines in broad strokes how the state plans to meet its goal of reducing GHG emissions to 1990 levels by 2020. One chief mechanism is a cap-and-trade system, in which greenhouse gas emissions are limited in certain sectors, and that limit is gradually reduced over time until the goal is met. The final Plan gives voluntary renewable energy purchasers the power to retire allocations, thus reducing the overall amount of GHG allowed to enter the atmosphere from the electricity sector.
This policy adds a second, powerful component to regulations that will include accelerating utility purchases of renewable energy, and state incentives for solar power. Federal studies have shown that voluntary purchases of renewable energy are as important and effective as regulated markets in spurring new development of renewable projects. And, since energy use is estimated to cause up to 40 percent of GHG emissions, increasing renewable energy use is a critical tool in reducing energy consumers’ contributions to climate change.
“Voluntary renewable power purchases by individuals, businesses, and others, serve to reduce greenhouse gas emissions under the cap,” says the Plan’s final language.
“Credit for voluntary action is a crucial component of the implementation, in that it recognizes and preserves the value of private investments in renewable energy made now and in advance of the trading regime,” said CRS Executive Director Arthur O’Donnell. “We believe it also illustrates California’s endorsement of renewable energy as a legitimate means to reduce GHG emissions now and in the future.”
According to a recent report by the National Renewable Energy Laboratory, the U.S. voluntary renewable energy market increased more than 50% in 2007, with retail sales totaling about 18 million MWh. The bulk of these purchases were made by businesses purchasing renewable energy certificates to reduce their environmental footprint. Since 2004, the voluntary market has demanded a greater share of renewable energy from new facilities than individual state goals require.
“CRS is very pleased that ARB has listened to the voices of many stakeholders,” O’Donnell said, “including prominent businesses that are committed to the use of clean, renewable energy and who show their commitment through participation in programs like Green-e Marketplace and the US EPA’s Green Power Partnership.”
Rulemaking for the specific provisions under the plan will begin in 2009, with the cap-and-trade system beginning in 2012. The document is available from the CARB website.
About Center for Resource Solutions
Center for Resource Solutions (CRS) is a national nonprofit with global impact. CRS brings forth expert responses to climate change issues with the speed and effectiveness necessary to provide real-time solutions. Its leadership through collaboration and environmental innovation builds policies and consumer-protection mechanisms in renewable energy, greenhouse gas reductions, and energy efficiency that foster healthy and sustained growth in national and international markets. For more information about its programs, including Green-e, visit www.resource-solutions.org and www.green-e.org.