Cap-and-trade

SJV Clean Transportation Center: Dec./Jan. Newsletter


Welcome to the December 2017 San Joaquin Valley Clean Transportation Center Newsletter. With funding from the California Energy Commission, CALSTART opened the Center with the goal to accelerate the use of clean vehicles and fuels and help the region more quickly meet air quality targets.


San Joaquin Valley to Receive More Than $88 Million in State Cap-and-Trade Funds 

The San Joaquin Valley Air Pollution Control District (SJVAPCD) Governing Board at its Dec. 21 meeting voted to accept more than $88 million in funding from the state's cap-and-trade proceeds. The Valley is receiving $80 million – nearly a third of $250 million allocated by the California Air Resources Board (CARB)  to fund Carl Moyer projects and clean trucks that meet Prop 1B guidelines.

Another $8.4 million is for AB 617 implementation, which requires air monitoring at the community level in order to better protect those in areas most impacted by air pollution.

Even better news is that significantly more money will be heading to the San Joaquin Valley. (See graphic above from the presentation made to the SJVAPCD Board.) The Air District expects to receive millions more for dairy digesters, several programs targeting emissions reductions in agriculture, and greenhouse gas projects for food processors.

"It's the most we have ever seen, and perhaps the most we will ever get," President/CEO Roger Isom of the California Cotton Ginners & Growers Association said during public comments made at the meeting. He encouraged the Air District to move quickly to get the funding distributed. The state has set strict deadlines, mandated by law, requiring funds to be encumbered (under executed contract) by June 30, 2019, and liquidated (paid out) by June 30, 2021.

Biorem Energy President Mark Terry, who traveled from Idaho to attend the meeting, encouraged the Air District to examine existing funding criteria for heavy-duty trucks so that larger trucking companies would have more of an incentive to convert diesel trucks in their fleets to compressed natural gas (CNG). He suggested a trade-up component as well, where high-mileage trucks that may only be three to five years old would not need to be destroyed. SJVAPCD Air Pollution Control Officer Seyed Sadredin indicated they are working with CARB to allow a trade-up provision.    



A DC fast charger opened recently at Kern Federal Credit Union, becoming the first level 3 charger in downtown Bakersfield. The Air District's Charge Up! program, which helped fund this project, recently was expanded to include workplace charging sites.

Charge Up! Expands to Workplace Sites; New EV Funds Target Fresno County 

The San Joaquin Valley Air Pollution Control District's (SJVAPCD) Charge Up! program, which provides funding for EV charging equipment and infrastructure, is expanding to include workplace charging. The program previously required chargers to be open to the public for a minimum of 30 hours per week.

Charge Up! also will shift to a voucher-based system from a rebate program to increase program participation, efficiency and flexibility, resulting in an overall streamlining of the program. A new application will be available soon. To date, $1.3 million has been awarded by the Air District for 182 level 2 and level 3 EV chargers

A new state program debuted Dec. 20 in Fresno County, providing $4 million in new funding for EV charging and infrastructure projects. The Fresno County Incentive Project (FCIP) is the first incentive project to be launched under the California Electric Vehicle Infrastructure Project (CALeVIP).

FCIP will provide rebates for the purchase and installation of eligible level 2 electric vehicle chargers to owners of commercial properties, apartments, condominiums, workplaces and public agencies in Fresno County. Rebate amounts are up to $4,000 for single-port EV charging stations and $7,000 for dual-port EV charging stations. FCIP funding may be combined with Charge Up!, which offers $5,000 per unit for single-port chargers and $6,000 per unit for dual-port chargers. Charge Up! also will fund up to $25,000 for DC fast chargers, with funding approved on a case-by-case basis.

CALeVIP is funded by the California Energy Commission (CEC) and implemented by the Center for Sustainable Energy (CSE), which also administers the state's Clean Vehicle Rebate Project (CVRP). CALeVIP currently is funded for more than $15 million, with the potential to receive up to $200 million.

“As the state transitions to cleaner transportation in order to meet clean air standards and climate goals, it’s important to increase access to the charging infrastructure that makes plug-in electric vehicles a more viable option for communities across California,” Energy Commissioner Janea A. Scott said in an article posted on CSE's website.

An application and guidelines are on the FCIP website. Read the entire CSE article for more information



Two Proterra Catalyst buses will be added to Yosemite's shuttle fleet in late 2018, making it the first U.S. national park to permanently add battery-electric, zero-emission buses to its fleet. 

Yosemite Becomes First U.S. National Park to Purchase Electric Buses 

Yosemite National Park will add two Proterra Catalyst electric buses to its fleet, becoming the first U.S. national park to permanently add zero-emission, battery-electric buses to its shuttle fleet. The buses will begin service in late 2018 and will operate throughout the year, transporting up to 1,480 visitors per day.

One of the nation's most-visited national parks, Yosemite attracts more than five million visitors from around the world each year. Increased vehicle congestion has contributed to air pollution and noise problems in the park, and Yosemite relies heavily on its shuttle program to encourage visitors to park once and use a bus to circulate among lodges, waterfalls and trailheads. This free shuttle service travels approximately 436,000 miles with 3.8 million boardings annually. 
In 2001, the park began replacing its diesel bus fleet with diesel-electric hybrid vehicles. The new Proterra Catalyst buses are expected annually to reduce 887,000 pounds of greenhouse gas emissions and save approximately $150,500 on maintenance and operating costs. 
“Since its establishment in 1890, airborne pollutants have steadily degraded Yosemite’s resources," said Yosemite National Park Acting Superintendent Chip Jenkins. "Deploying Proterra’s battery-electric buses will help with this ongoing challenge and will greatly improve local air quality.”
The U.S. General Services Administration (GSA) has committed to greening the federal fleet, including the national parks, by working with businesses to make cleaner, quieter transportation readily available and affordable to partner agencies. As a resullt, GSA's list of federal fleet acquisition options now includes the Proterra Catalyst.
“The Proterra team is especially proud to directly contribute to the preservation of Yosemite National Park.," said Proterra President and CEO Ryan Popple. "We are honored to partner with the National Park Service to provide clean, quiet transportation to the millions of visitors who love to visit our national parks.”

With its headquarters in Burlingame, Proterra also has offices in the Los Angeles area in the City of Industry and in Greenville, South Carolina. The company currently has more than 490 electric buses operating in 61 different municipal, university, airport and commercial transit agencies in 29 states.



Thomas Paddon 

Paddon Joins SJVCTC Staff  

Thomas Paddon is the new Regional Project Manager for CALSTART's San Joaquin Valley Clean Transportation Center (SJVCTC), joining the staff in December. He currently is working with SJVCTC Director Joseph Oldham to open a new office in Stockton and will be responsible for driving the Center’s objectives in the northern San Joaquin Valley, taking a pragmatic, economics-driven approach to accelerating the growth of clean transportation technologies.

Prior to CALSTART, he spent many years helping to develop startup businesses, primarily in the solar and electric vehicle space. Most recently, he was working with a solar software startup whose mission was to speed the adoption of solar, battery storage and electric vehicle investments using electricity usage data.

Paddon earned his master of arts degree in Management from the University of Redlands and a bachelor of arts degree in French and International Business from the University of South Florida. As a commercial pilot, he is excited to be a part of CALSTART’s Sustainable Aviation Project that features electric aircraft.

The mission of the SJVCTC is to provide no-cost technical assistance, project development expertise and assistance with acquiring project funding to San Joaquin Valley vehicle fleet owners, businesses and residents with the goal of reducing vehicle emissions and improving air quality. To help achieve that mission, the Center is working with the San Joaquin Valley Air Pollution Control District, SoCalGas Co., Pacific Gas and Electric Co. and others to speed the deployment of electric vehicle charging stations and natural gas fueling infrastructure.

News Briefs... 

FEDERAL EV CREDIT SURVIVES IN INCOME TAX REFORM BILL

Those looking to buy an electric vehicle in 2018 can breathe a sigh of relief. The federal EV income tax credit of up to $7,500 has been retained in the $1.5 trillion tax overhaul package signed by President Donald J. Trump on Dec. 22.

The credit had been eliminated in the House proposal drafted by Republicans several weeks ago, but was included in the Senate's version of the tax bill. That led to speculation in recent weeks about the fate of this important incentive for EV buyers and the potential impact on the EV industry. 

CALSTART, in a letter signed by many of its more than 180 member companies, lobbied to keep the credit, stating that it "protects U.S. job creation and leadership in the electric vehicle sector." See a
USA Today article for more details.

SHEIKH TO SUCCEED SADREDIN AS SJVAPCD APCO

Seyed Sadredin has announced he will retire in 2018 after leading the San Joaquin Valley Air Pollution Control District since 2006. His career in air quality has spanned more than three decades.

Samir Sheikh will succeed Sadredin as the District's Air Pollution Control Officer (APCO), effective July 7. A longtime Air District employee, Sheikh currently serves as Deputy APCO with leadership over the Strategies and Incentives Department and several other administrative areas of the organization.    

Looking for Grant Information?

The San Joaquin Valley Air Pollution Control District offers a variety of grants and incentive programs for public agencies, residents, businesses and technology. Interested parties should apply early since incentives typically are available on a first-come, first-served basis. A complete list of current incentive programs is available on the Air District website.

The California Air Resources Board (CARB) administers grant programs funded through various sources, including the cap-and-trade program. A complete list of the various funding programs is available on the
CARB website.

The California Energy Commission (CEC) also administers grant programs for transportation technology. Go to the 
CEC website for information.

Various federal agencies offer grants and incentives for transportation technology each year. All federal agencies use the
Grants.gov website for submitting and receiving grant applications. 
 


“The CALSTART San Joaquin Valley Clean Transportation Center is a joint project between CALSTART and the California Energy Commission (CEC). It is funded through a grant from the CEC with the mission to assist residents and businesses in the San Joaquin Valley deploy cleaner transportation options to help improve air quality and promote economic prosperity.  For more information about CALSTART, visit www.calstart.org.”

Copyright © 2017 by CALSTART, All rights reserved.

Contact Us
Joseph Oldham, Director    Thomas Paddon, Regional Project Manager
San Joaquin Valley Clean Transportation Center
Fresno Address: 510 W. Kearney Blvd., Fresno, CA 93706
Fresno Phone: (559) 797-6034
Stockton Address: 5000 S. Airport Way, Suite #208, Stockton, CA 95206
Stockton Phone: (626) 744-5637
Email: joldham@calstart.org and tpaddon@calstart.org

Newsletter Editor: Brenda Turner, Project Clean Air
projectcleanairprograms@gmail.com

Statewide LG EE Best Practices: Weekly Update

Here are you wEEkly updates:


News and Announcements

1. Updated Version of the Proposition 39 (K-12) Snapshot is Now Online

Updated version of the Prop 39 K-12 program snapshot is now online measuring expenditures, estimated annual energy savings, and GHG reductions. More information on Prop 39 (California Clean Energy Jobs Act) can found here.

2. Multi-family Solar Development Webinar

Informational webinar which will provide background about the goals of the Virtual Net Metering Market Development Project supported by the Center for Sustainable Energy. Learn more about Virtual Net Metering and solar for multifamily dwellings here.

3. RFP: Low-Income Weatherization Program (LIWP)

Notice of Intent to Award is Today! The Low-Income Weatherization Program is an energy efficiency program administered by California Department of Community Services and Development to install a variety of energy efficiency measures, solar photovoltaics and solar water heater systems on low-income households located in disadvantaged communities.

4. Getting to Zero Carbon in Menlo Park: A Northern California Suburb Revamps Its Approach to the Built Environment

“…small cities have an important leadership role to play on climate action, because they account for more emissions and represent a larger share of the population than big cities.”

5. San Diego’s Climate Action Plan Making Progress—And Creating Jobs

Highlighting the impact and progress of the city of San Diego’s Climate Action Plan, not only providing environmental benefits but also improving the economy.


Reports and Resources


6. Integrated Emissions Visualization Tool

ARB has developed an integrated emissions visualization tool (IEVT) that allows users to locate and view emissions of greenhouse gases (GHG) and criteria pollutants from large facilities in California. ARB is looking for feedback from the public and others users on this initial version of the IEVT.

7. Updated Cap-and-Trade Funding Guidelines

The Air Resources Board has published the Funding Guidelines Supplement for Fiscal Year (FY) 2016-17 Funds. The Supplement includes updated disadvantaged community investment targets for all FY 2016-17 budget appropriations and also provides criteria todetermine whether projects funded by the new FY 2016-17 appropriations will provide benefits to disadvantaged communities.

8. Draft 2015 SCE Home Energy Efficiency Survey Evaluation Report

The report is posted for public comment and review on the CPUC Public Document Area here. (Search: “Draft 2015 SCE HEES” ). Or you can click the title above to view the report directly.


Career Opportunities


9. Energy Specialist, San Francisco

The City and County of San Francisco Department of the Environment (SF Environment) is seeking an Energy Specialist who will assist in monitoring, evaluating, and implementing projects, programs and policies focused on Distributed Energy Resources including energy efficiency, renewable energy, energy storage and zero emission vehicles.

10. Energy Manager, San Francisco (Job ID: 6317)

San Francisco State University is seeking an Energy Manager to establish the campus as a national leader in sustainability and energy management. This position will provide a forward thinking energy professional with an opportunity to use the campus as a living laboratory to save energy, reduce greenhouse gas emissions, and promote renewable energy.

11. Chief Executive Officer, Yolo County

The County of Yolo is conducting a recruitment on behalf of The Valley Clean Energy Alliance for the Chief Executive Officer position.



That's all for today! Cheers and have a great weekend!





Statewide LG EE Best Practices: Weekly Update

Here are your wEEkly updates:

1. Cap and trade news: On Tuesday, Governor Brown announced a plan led by the California Air Resources Board (ARB) to extend cap-and-trade beyond its current expiration in 2020, to 2050. Read the plan, or get overviews from Utility Dive and the Los Angeles Times.

2. AB 802/Benchmarking Developments: California Energy Commission (CEC) staff will conduct a public workshop to seek input on staff’s proposed draft regulations to implement the building energy use data access, benchmarking, and public disclosure provisions of Assembly Bill 802.

3. AB 802 Background: A prior CEC workshop on this was March 25th; a partial recap is available here. (Refresher on AB 802 available here.)

4. NBI’s October ZNE Forum: the New Buildings Institute’s “Getting to Zero” Zero Net Energy Forum this October 12th-14th. Click to learn more about topics and speakers, and register.

5. EE Coordinating Committee Updates: The CA EE Coordinating Committee (CAEECC) had their 7th meeting this week. The agenda, meeting documents, and how to participate in future meetings is available in this CAEECC Update summary.

6. $20M Available from Federal AgenciesLooking for funding? More than $20 million is available to state, local and tribal governments for climate change health impacts, coastal ecosystem resiliency, clean diesel, and climate and agriculture projects.

7. EE management motivators for business: Promoting energy management to your business community? This Environmental Leader article shares some leading reasons that the private sector is deepening their engagement in energy management - including market volatility, cost savings and public interest in sound climate and energy policies.

8. New technologies for ZNE: The California Energy Commission approved six grants July 13th focused on energy efficiency with $8 million awarded for technologies and measures designed to achieve zero net energy (ZNE) in new affordable housing and multifamily and commercial buildings.

9. More on zero net energy: At this year’s SEEC Forum, we asked California’s cities and counties to share with us how they are using innovative technologies to find deep energy savings in their buildings – and it turned out speakers wanted to speak to using technology and design to push toward a zero net energy goal. Learn more about their best practices shared in this CURRENTS article (and get a link to watch their Forum presentations online!).

10. Reaching the EJ Community: A number of cities are deepening their focus on environmental justice issues through the use of target “green zone” neighborhoods. Learn more about best practices in the use of green zones at this Statewide Green Zones Convening event July 28th in Los Angeles.

11. More on environmental justice and EE: For more on environmental justice best practices, see this recent CURRENTS article highlighting best practices shared by California EJ leaders (including why EE is a foundational EJ community engagement resource).

12. Sonoma and Woodlake Solar: Congratulations to Sonoma County and Tulare County’s Woodlake Unified School District for the approval of California Energy Commission (CEC) loans to install solar photovoltaics (PV) in their buildings.

13. Benefits from DERs: A new study overseen by the CEC in partnership with Southern California Edison finds over $300 million in benefits from distributed energy resources (DERs) in the San Joaquin Valley.

14. Job announcement: The San Luis Obispo County Department of Planning & Building is offering an exciting career opportunity for Senior Planner in the Energy unit. Learn more here.

15. Job announcements: The City of Chula Vista is inviting applications for the positions of Senior Conservation Specialist and Recycling Specialist I. Get descriptions, and links to apply here.

As always, you can keep track of relevant events by connecting to the EE Events Calendar, and find more resources being added daily on the EECoordinator website – including past WEEkly Updates.




That’s all for this week!




Statewide LG EE Best Practices: Weekly Update

Here are your wEEkly Updates:

1. Call for climate adaptation proposals: The call for session proposals for this year’s California Adaptation Forum has been extended! The Adaptation Forum will take place in Long Beach, CA September 7th-8th. Learn more here.

2. Valuing EE in buildings: I’ve been hearing from a number of local governments about the importance of solid statistics on the financial value of energy efficiency for buildings leads, contractors, realtors, and residents to make efficiency decisions that can transform the market. A new study published in the Journal of Structured Finance analyzes California homes and shares some great statistics on resell values of homes with PACE projects: read the results, and connect to more resources on valuing EE, here.


3. AB 802 Comment Period Extended: Related to energy disclosure and valuing EE, the CEC has extended the comment period on their proposed implementation of AB 802 benchmarking and energy disclosure requirements to April 15th. A transcript of the March 25th meeting covering their proposal and public comments has also been added to their website for review. For more, click here.

4. EE technology best practices: the U.S. Department of Energy's 2015 Quadrennial Technology Review has been released, and contains a wealth of best practices information in deploying technologies for energy efficiency (and other benefits). Click here to review in full, or here to connect to the chapter on Advanced Building Technologies.

5. Funding for Healthy Cities: More than $1.5 million is available to small/medium cities, counties and tribes: click here for more information. For more EE, energy and sustainability-related funding opportunities, click here.

6. Valuing cap and trade implementation for low-income Californians: A new study from UCLA has analyzed the value of cap and trade programming and compliance costs for low-income Californians, and found positive results. Click here for more.

7. Upcoming webinars from USEPA, USDOE, and more: click here to review more than 10 webinars coming up this month offering support on EPA Portfolio Manager, serving low-income communities, navigating DOE's new weatherization center, and renewables integration in California.

8. Building code training opportunities added: Looking for more Title 24 training opportunities? No-cost trainings for building inspectors, plan examiners, consultants, and more are available from Energy Code Ace. Click here to see their training schedule or to request a training. The CEC will also be offering building code trainings through local ICC Chapters – click here for more information.

9. Energy storage financing: More and more local governments are incorporating energy storage into their energy and resiliency planning. An event covering the status of energy storage, and how to implement using financing, will be held by the Clean Energy Advisory Financing Council (CEFAC) in San Francisco and by webinar April 12th. For more information, click here.

10. EE, sustainability and economic growth: click here for 5 signs that sustainability is the new engine for global economic growth. For more on EE supporting economic growth, check out these short videos from the Construction Climate Talks and testimonials from businesses using EPA ENERGY STAR.

11. Several job announcements today: the City of San Diego is hiring for an Energy Program Coordinator! Learn more here.

12. Job announcement: Marin Clean Energy is hiring for a Customer Programs Specialist and a Law Clerk (Intern). Learn more here.

13. Job announcement: the Port of San Diego is hiring for a Senior Environmental Specialist. Click here for more information.

14. Leverage CivicSpark this coming year: And, a reminder that for local governments looking for capacity for energy efficiency and sustainability, now is the time to propose a project for a CivicSpark AmeriCorps fellow for the coming year! Learn more here.

As always, you can keep track of relevant events by connecting to the EE Events Calendar, and find more resources being added daily on the EECoordinator website



That’s all for this week!

Statewide LG EE Best Practices : Weekly Update

Here are your WEEkly Updates:
  1. EM&V Roadmap Draft Now Available for Comment
    The CPUC released the 2013-2016 Energy Division & Program Administrator Energy Efficiency Evaluation, Measurement and Verification Plan, which is open for comments now through December 17th. This version includes the EE portfolio - HVAC, lighting, commercial, industrial, agriculture, and more for you to review and comment on.
  2. San Diego City Council Readies 100% Renewables Mandate for Approval
    The San Diego City Council's environmental committee unanimously approved a proposed Climate Action Plan that would move the city to 100% renewables by 2035. To get to 100%, the San Diego Climate Action Plan puts Community Choice Aggregation (CCA) in place.
  3. Report: Recognizing the Value of Energy Efficiency's Multiple Benefits
    The benefits of energy efficiency extend beyond energy savings. Focusing on the residential, business, and utility sectors, this report examines each of these multiple benefits, their role in program marketing, and current best practices for including them in cost-effectiveness testing.
  4. Job Opportunity: Statewide Energy Efficiency Best Practices Coordinator
    The Local Government Commission (LGC) in partnership with the Institute for Local Government and ICLEI - Local Governments for Sustainability through the Statewide Energy Efficiency Collaborative is recruiting to fill the Coordinator position. The LGC is open to other arrangements that are not full-time to fill this position.
  5. Job Opportunity: Sustainability Coordinator, Contra Costa County (attached)
    The Sustainability Coordinator is a management position assigned to the merit-system classification of Principal Planner-Level A in the Department of Conservation and Development. Under general direction, the Sustainability Coordinator plans, organizes and coordinates the implementation of the County's Sustainability Activities. Application deadline is December 18, 2015.
  6. 12/8 California Gold: Partnerships for Cap-and-Trade Success
    The Southern California Association of Governments is holding its second regional forum on competitive grant funding from cap-and-trade revenues. This event will assist applicants seeking funding in the near term for transformative projects implementing Southern California's regional and local plans. The workshop will take place at SCAG's main office with video conference options available.
  7. 12/15 Best Practices in SEEC ClearPath: A Year in Review
    Participants will learn emerging practices and updates on how to best utilize SEEC ClearPath to monitor and track government operations and community-scale emissions data. This will be a great opportunity to gain a better understanding of how to best leverage SEEC ClearPath to its fullest.

And that is all for this week!

Emission Benchmarks for Industrial Processes



California Air Resources Board (CARB) has been working hard to achieve California’s goal of reducing emissions of greenhouse gases to 1990 levels by 2020. This is equivalent to a 30% reduction in projected emissions--a lofty goal to accomplish within the next 7 years. Ultimately, the intent is to reduce emissions by 80% by 2050. If you factor in situations such as population growth and thus increased demand, it becomes a very ambitious goal. 

Can we make it? 

It has become apparent to me that when the cost of compliance becomes more cost effective than the cost of pollution, pollution be able to be controlled.

The University of California, Berkeley and Northwestern University are working with the CARB to establish output-based benchmarks for industrial processes. Such benchmarks will be used for the distribution of free emission allowances facilities covered by the California Cap-and-Trade Program, which is one of the newest policy instruments the state has adopted to reduce emissions cost-effectively. 

One of the main results of the project will be output-based benchmarks for selected sectors, for which benchmarks do not currently exist (mainly food processing, important for the Central Valley). Another major part of the project focuses on the benchmarking approach for refineries in the period after 2015. 

US Climate Action: Calling individuals to put on the uniform and step up to the plate.



By adopting an ambitious mandatory energy saving target for 2030 the State of California is well on its way to addressing the pressing issue of Climate Change. Global climate change affects the American public with growing visibility and ferocity. As severe weather events wreak havoc on the East coast or wildfires consume hundreds of thousands of acres here in the West, concern about the effects of climate change grows. In addition, the American public bears a heavy financial burden as tax dollars fund increased firefighting efforts; provide disaster relief to flooded cities and towns; and subsidize the climate issues affecting the American bread basket. However, despite the growing cost to cope with the effects of climate change, national policy to address climate change is still a long way off.

Cap-and-Trade in the US
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory CO2 reduction cap-and-trade program in the US. Under RGGI Northeastern and Mid Atlantic states have capped the CO2 emissions in the power sector with the goal of reducing power sector CO2 emissions 10 percent from the 2002-2004 average by 2018.

California began its own cap-and-trade program as well, with several major industrial sectors joining power as capped entities. Many other states – and hopefully the federal government- are watching intently to see how the California program plays out, as California prides itself on its trailblazing adoption of many environmental policies.

Federal cap-and-trade programs are not new in the U.S., with many people being familiar with the 1990 Clean Air Act Acid Rain Program’s SO2  trading system. This cap-and-trade system is widely considered a major success,with an Office of Management and Budget study finding benefits exceeding costsby a 40:1 ratio

Policy on Climate Change
Americans, witnessing a relentless onslaught of wildfires, droughts and recent flooding are fearful of losing their freedoms and way of life. As severe weather is becoming the new normal across the U.S., the price of inaction is becoming ever clearer. The specific cost and benefits of the cap-and-trade programs are yet to be determined, and a public that traditionally looks so favorably on market-based solutions and “quick wins” remains unconvinced on the potential of a market-based cap and trade solution.

Climate change could fundamentally change how we as Americans interact with each other, the rest of the world, and our environment. As the U.S. struggles with national policy on climate change, we fall behind other countries on this important global issue. In his victory speech on election night, President Obama gave brief but equal mention to ending the dependence of the US on foreign oil and tackling climate change. Perhaps by addressing climate change in terms of energy security federal action stands a chance. Perhaps, under the emerging “new energy economy” America can reclaim its position of leadership in the world.

Photo Credit: http://www.flickr.com/photos/sully_aka__wstera2/4388591845/

Mystery unveiled, California and how it trades its caps.

"Let the Hunger Compliance Games begin!"

What is California’s Cap and Trade and what makes California believe it can achieve something the nation could not?  For starters, you may be asking, what is all the hoopla about cap and trade? Well, the basics of cap and trade are simple; it uses the power of the marketplace to reduce pollution, in theory doing so at the lowest possible cost. In the Golden State system, government regulators set an annual limit (cap) on the GHG emissions produced by the state’s factories, power plants and oil refineries. The cap will decline about a percentage point for the first two years and three percent each year after that.

The basic premise of cap-and-trade is that government doesn't tell polluters how to clean up their act. Instead, it simply imposes a cap on emissions. Each company starts the year with a certain number of tons allowed—a so-called right to pollute. The company decides how to use its allowance; it might restrict output, or switch to a cleaner fuel, or buy a scrubber to cut emissions. If it doesn't use up its allowance, it might then sell what it no longer needs. Then again, it might have to buy extra allowances on the open market. Each year, the cap ratchets down, and the shrinking pool of allowances gets costlier. As in a game of musical chairs, polluters must scramble to match allowances to emissions.


Companies will buy and sell allowances to emit carbon dioxide and other heat-trapping gases (GHG). Now, each allowance represents one ton of Carbon Dioxide (CO2). The minimum price starts at $10 per allowance (ton of Co2) and will slowly increase over time. The number of allowances that a company must hold is determined based on the standard emission from their type of business or facility. Companies that cut their emissions quickly will have spare allowances they can sell to other businesses that are having a hard time making reductions. This is easy to see if we look at emissions through an industry specific looking glass, as it would be difficult to conceive of a cap and trade program working without allowances being industry specific.

In the beginning were the electric utilities. The utility companies will be getting all the allowances they need for free (for a while anyhow).  The utilities will be required to sell allowances at state-organized auctions that occur four times each year. The money the utilities make must be used to benefit their ratepayers, possibly through a credit on customers’ bills or maintenance on equipment and transmission lines that would offset rate hikes much like the one the CPUC just approved. Most manufacturers will receive 90 percent of their allowances for free in the first two years, dropping to 75 percent in 2015.

The first auction happened last November and had 23,126,110 tons of 2013 vintage Co2 allowances up for sale on an electronic trading platform. Companies and traders who registered in advance submitted sealed bids specifying how many allowances they wanted to buy, and at what price. The bids were ranked from highest price to lowest until all the allowances have been allocated. The lowest price at which allowances were allocated became the price that all participants paid, regardless of their original bids. In November’s auction, the allowances sold for $10.09 with the reserve price set at $10 and the maximum price submitted was at $91.13 mean price was $15.60 and the Median price was $12.95. Where is Effie Trinket when you need her? Now, as far as the secondary market, companies and traders can continue trading outside the auctions, but each allowance has a serial number, and all transactions must be recorded in a central tracking system.

There was also an advance auction of 2015 vintage allowances that sold 5,576,000 of 39,450,000 available allowances for sale at the price of $10.00 with a maximum bid of $17.25 and the mean of $11.07 and Median price being $10.59, the maximum price submitted was $17.25 and the minimum was $10.00 and therefore all 2015 vintage allowances were sold at $10.00. The drawback of buying vintage 2015 allowances is that your funding source is tied up two years in advance; the benefit is that you pay a much cheaper price for allowances purchased today that will be used in 2015, when the number of allowances will be dropping to 75 percent. In layman’s terms, if you know your company will need allowances in 2015 and it has the capital to purchase allowances today, the price will be rock bottom today ( hence the $10 price tag) vs. purchasing them in 2015 when every industry will need them and the price is much higher. How about this for a business venture, buy up all the 2015 allowances you can and sell them when 2015 comes around for three to four times the price they were originally purchased for.  Sounds like a great way to make it rich to me.


See the air resource board for a complete list of qualified bidders and a more detailed account of the November 2012 auction. Below is a sampling of what you can expect to find:

Offsets
Companies can also buy offsets, credits generated by forestry projects and other endeavors that either remove greenhouse gases from the atmosphere or reduce emissions. But the offsets must be generated in the United States and can account for no more than 8 percent of all the allowances that a company needs. To me, offsets should be limited to the state of California (for this specific situation) as other states and federal entities are not participating and thus, should not be allowed to participate in an offset program?

Market manipulation?
The Air Resources Board has set limits on the percentage of available allowances that any individual company or trader can hold, to prevent anyone from cornering the market. Consultants will also monitor the auctions, looking for unusual trading behavior. We can all see this one happening or at least someone trying to make this happen.

Where does the money go?
Amazingly enough, this hasn't been decided; by law, money the state raises by selling allowances must be used to help reduce greenhouse gas emissions and cannot simply be dumped into California's general fund as if it were tax revenue. But the Legislature has not yet hammered out the details.

Important information
Hirschman-Herfindahl index (HHI):  The HHI is a measure of the concentration of allowances purchased by winning bidders relative to the total sale of current vintage allowances in the auction.  The percentage of allowances purchased by each winning bidder is squared and then summed across all winning bidders.  The HHI can range up to 10,000, representing 100% of the current vintage allowances purchased by a single bidder (i.e., 100x100=10,000).




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Photo Credit: Jacobsen, Nina and Kilik, Jon (Producers) & Ross, Gary (Director). 2012. The Hunger Games [Motion picture]/ United Sates. Lionsgate, Color Force. 

Photo Credit:  http://www.flickr.com/photos/cecmtl/5594631871/

Report: Cap- And -Trade Could Create Jobs In California


A new report suggests a cap-and-trade program in California could be good for the state. Here's the story in The Sacramento Bee, along with a link to the study and related press release.


California voters signaled their support for green energy in the recent election, supporting AB 32, The Global Warming Solutions Act adopted in 2006, and sweeping Jerry Brown back into office. Brown, who faces a daunting deficit, has a strong green-jobs platform.
Graphic by mind.ofdan.ca