Carbon traders and regulated entities have urged California to boost the supply of offset projects available under its greenhouse gas emissions cap-and-trade program to avoid skyrocketing compliance costs during the second phase of the program.
Their plea came April 11 at the Climate Action Registry’s 10th annual conference, which focused largely on California’s economywide emissions trading program and efforts to link it with the cap-and-trade program adopted by the Canadian province of Quebec (see related story; 69 WCCR, 4/10/12).
Brokerage firms and other watchers of the carbon markets speaking at the event mostly praised the structure and design of California’s program, but said their analyses indicated there would be a shortage of carbon offsets beginning in 2015, pushing the cost of compliance instruments up.
Officials from Chevron Corp. and Pacific Gas and Electric Co. also expressed concern about compliance costs and suggested the California Air Resources Board increase the time period in which covered entities are allowed to retain carbon offsets.
At the opening plenary, CARB Chairwoman Mary D. Nichols acknowledged the potential shortage of offsets.