Californias Cap-and-Trade 101 Cap-and-Trade Symposium Sacramento - - PowerPoint PPT Presentation

▶
california s cap and trade 101
SMART_READER_LITE
LIVE PREVIEW

Californias Cap-and-Trade 101 Cap-and-Trade Symposium Sacramento - - PowerPoint PPT Presentation

Jan 14, 2024 170 likes •520 views

Californias Cap-and-Trade 101 Cap-and-Trade Symposium Sacramento July 17th, 2013 American Carbon Registry / Marten Law Session Overview Symposium is about compliance instruments acquiring, creating, buying, selling 1.

slide-1
SLIDE 1

Cap-and-Trade Symposium Sacramento July 17th, 2013

American Carbon Registry / Marten Law

California’s Cap-and-Trade “101”

slide-2
SLIDE 2

Session Overview

Symposium is about compliance instruments – acquiring, creating, buying, selling

  • 1. California’s cap, allowances & offsets
  • 2. The Value Chain – who is involved?
  • 3. Framework for discussing compliance instruments
slide-3
SLIDE 3

Session Overview

Symposium is about compliance instruments – acquiring, creating, buying, selling

  • 1. California’s cap, allowances & offsets
  • 2. The Value Chain – who is involved?
  • 3. Framework for discussing compliance instruments
slide-4
SLIDE 4

162.8 159.7 394.5 382.4 370.4 358.3 346.3 334 100 200 300 400 500 2013 2014 2015 2016 2017 2018 2019 2020 MtCO2e

Total allowances between 2013 and 2020 = ~ 2.5 billion Affected sectors: ~ 350 large businesses representing about 600 facilities 2013-14: Electricity; oil refineries; large industrial facilities; all > 25,000 tCO2e/year 2015: + Distributors of transportation fuels; natural gas

California’s Cap

slide-5
SLIDE 5

2013

Free allocation Reserve Auction

Allowances

2015

2018

slide-6
SLIDE 6

13 13 32 31 30 29 28 27 5 10 15 20 25 30 35 2013 2014 2015 2016 2017 2018 2019 2020 MtCO2e

8% of compliance obligation (~ 203 million)

Offsets

slide-7
SLIDE 7

Opt-In Voluntary Entity

Entity within a capped sector with annual GHG emissions < 25,000 tCO2e

Voluntary Associated Entity

Non-capped entity seeking to purchase, hold, sell, retire or clear allowances or ARB

  • ffset credits

Other Registered Participants

Do not intend to hold allowances or ARB

  • ffset credits – i.e. Offset Project Registries,

Early Action Offset Programs, Verification Bodies

Voluntary Participants

slide-8
SLIDE 8

Offset Credits

Current Compliance Protocols

  • Livestock
  • U.S. Forests
  • Ozone Depleting Substances (ODS)
  • Urban Forests

Four “early action” protocols Protocols Under Development

  • Coal Mine Methane
  • Rice Management

Uncapped sectors

  • nly!
slide-9
SLIDE 9

Offset Credits: who?

Covered Entity Voluntarily associated entity Verification body OPO (asset owner) APD (project developer) Consultants/ service providers Offset Project Registry

slide-10
SLIDE 10

Offset Invalidation

  • Credits issued by another program for the same period
  • Credits overstated by more than 5%
  • Project not in accordance with local, state , national

regulations

Buyer Liability (…8 years 3 years)

  • Firms holding an invalidated credit must replace that

credit to remain in compliance

Offset Credits: risk

slide-11
SLIDE 11

By 2020 expected shortfall of 134 MMTCO2e

50,000,000 100,000,000 150,000,000 200,000,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 MTCO2e CMM Rice Forestry Livestock ODS

Offset Credits: supply

slide-12
SLIDE 12

Linkage

Quebec California

slide-13
SLIDE 13

The Big Picture

slide-14
SLIDE 14

Know the rules

Flexibility

Compliance periods Banking Offsets

Transparency

Clearing + rules OTC + anonymity

Cost containment

Reserve Auction Offsets

Timing concerns

Forward v. spot What products?

Risk or opportunity?

slide-15
SLIDE 15

Symposium is about compliance instruments – acquiring, creating, buying, selling

  • 1. California’s cap, allowances & offsets
  • 2. The Value Chain – who is involved?
  • 3. Framework for discussing compliance instruments

Session Overview

slide-16
SLIDE 16

Offset Value Chain

What to look for/provide in an offset Who can you do business with?

slide-17
SLIDE 17

Lifecycle of an Offset

Concept Registration Implementation Verification Review Issue Retired

May be sold one

  • r more times

May be invalidated for up to 8 years Buyer liability, but…

slide-18
SLIDE 18

Stakeholders

OPO (owner} Covered Entity APD (project developer) Verification Body Subcontractors VAEs (Liquidity)

slide-19
SLIDE 19

Reach of ARB

OPO (owner} Covered Entity APD (project developer) Verification Body Subcontractors VAEs (Liquidity)

slide-20
SLIDE 20

Making an Offset

Verification Body Subcontractors APD OPO

slide-21
SLIDE 21

Making an Offset

Verification Body Subcontractors APD OPO

Retired Concept Registration Implementation Verification Review Issue

slide-22
SLIDE 22

Role of the Registry

Verification Body

Retired Concept Registration Implementation Verification Review Issue

slide-23
SLIDE 23

Transacting

OPO (owner} Covered Entity APD VAEs (Liquidity)

slide-24
SLIDE 24

Transacting: VAEs

OPO (owner} Covered Entity APD VAEs (Liquidity)

slide-25
SLIDE 25

Transacting: CEs

OPO (owner} Covered Entity APD VAEs (Liquidity)

slide-26
SLIDE 26

Transacting

OPO (owner} Covered Entity APD VAEs (Liquidity) Verification Body

slide-27
SLIDE 27

Symposium is about compliance instruments – acquiring, creating, buying, selling

  • 1. California’s cap, allowances & offsets
  • 2. The Value Chain – who is involved?
  • 3. Framework for discussing compliance instruments

Session Overview

slide-28
SLIDE 28

Risk

Opportunity

slide-29
SLIDE 29

Risk

Regulatory

State (repeal; litigation) Federal preemption (two flavors) Interpretation

Counterparty

Out of business Insolvent Bad faith or negligent

Project

Discontinues this type of work Invalidation/Reversal Technology

Other

Conversion Adoption

slide-30
SLIDE 30

Risk: Project Developer

Regulatory

State (repeal; litigation) Federal preemption (two flavors) Interpretation

Counterparty

Out of business Insolvent Bad faith or negligent

Project

Discontinues this type of work Invalidation/Reversal Technology

Other

Conversion Adoption

slide-31
SLIDE 31

Risk: Buyer

Regulatory

State (repeal; litigation) Federal preemption (two flavors) Interpretation

Counterparty

Out of business Insolvent Bad faith or negligent

Project

Discontinues this type of work Invalidation/Reversal Technology

Other

Conversion Adoption

slide-32
SLIDE 32

Managing Risk

Insurance Products

Low risk Good counterparties

Purchase

Due diligence Counterparty Value chain

Project development

Allocate risk through value chain Know you counterparty

Rules

Allowances Offsets

Risk into opportunity

slide-33
SLIDE 33

Remainder

Morning: Offset value chain & risk by project Afternoon: Trading perspective Moving beyond the 4 current protocols

slide-34
SLIDE 34

Belinda Morris

California Director American Carbon Registry

980 Ninth St., Suite 2060 Sacramento, CA 95814 t. 916.520-8628

  • m. 916.402.4141

e. bmorris@winrock.org www.americancarbonregistry.org

Erika Anderson

Of Counsel Marten Law

455 Market Street, Suite 2200 San Francisco, CA 94105 t. 415.684.9362

  • m. 415.265.6401

e. eanderson@martenlaw.com www.martenlaw.com

Contact Information