With California’s Cap-And-Trade Regulation Final, a Look at Key Numbers

California’s Office of Administrative Law (OAL) yesterday signed off on the state’s cap-and-trade regulation, developed by the state’s Air Resources Board to reduce climate pollution and unanimously approved in October. OAL’s approval is a prerequisite for the policy to become binding, making it official that hundreds of California businesses will be subject to new greenhouse gas (GHG) limits starting in 2013.

The new regulation is supported by a 2009 regulation requiring businesses to report emissions over certain size thresholds.

Generally, businesses are covered by the cap-and-trade rule if they annually release more than 25,000 metric tons of GHG pollution (CO2e) or import power that causes emissions greater than 25,00o tons.  Some exemptions apply, such as not counting carbon dioxide released by burning biomass.  The program will be expanded in 2015 to include fuel and natural gas suppliers.

EDF developed a profile of the facilities to be regulated to help the public understand the scope and breadth of the program. We analyzed pollution emissions and electricity import data from 2008 to 2010 and developed current summary statistics based on that data.

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We found the following:

  • In 2010, 527 entities reported GHG emissions, though not all are covered by the program.
  • Between 2008 and 2010, 473 entities reported releasing more than 25,000 tons of GHG per year.  The total in-state pollution was about 111 million tons per year, and about 172 million tons when counting imported electricity.
  • The average reported amount of emissions for an in-state source is about 360,000 tons per year.  Since the program includes very large polluters (35 in-state sources release more than 1 million tons per year), the median emissions rate is about 110,000 tons per year.
  • There are 14 types of businesses included in the program. The two with the most covered entities are electricity generation, with 116, and general stationary combustion, with 114.
  • The 116 in-state electricity generation facilities generate the greatest percentage of overall in-state emissions at 37 percent. Refineries are second at 29 percent, with 21 covered facilities.

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  • There were 63 entities reporting as power importers between 2008 to 2010.  These imported an average yearly megawatt hour (MWh) of about 98 million MWh (or 98 terawatts).

In addition to requiring an economy-wide reduction in climate pollution, the market-based regulation will cut other pollutants released alongside GHGs. It also lets businesses that cut more pollution than required sell excess allowances to companies that can’t meet their compliance obligations.  More detail on these aspects of the cap-and-trade regulation can be found here.

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