Business & Real Estate

State approves wave of “offsets” to ease compliance with carbon rules

To the oil refiners, cement makers and hundreds of other California companies laboring under the state’s strict limits on greenhouse gas emissions, state regulators served up some relief Wednesday.

The California Air Resources Board said it has approved a major batch of carbon “offset” credits that will make it easier for companies to comply with the emission rules. The agency approved credits generated by two forest projects on opposite coasts: Willits Woods, a 19,000-acre forest in Mendocino County, and a site in rural Maine.

Although the agency already approved a group of offsets in September, those credits were all generated by projects in other states. The Mendocino County forest is the first California program approved by the agency, said Air Resources Board spokesman David Clegern.

A total of 1.4 million carbon credits were OK’d by the agency Wednesday, which oversees implementation of AB 32, California’s landmark global-warming law. Each credit allows the holder to emit a ton of greenhouse gases.

Under the state’s year-old “cap-and-trade” program, more than 400 companies are subject to a ceiling on greenhouse gas emissions. The cap is lowered slightly each year.

Offsets allow businesses to satisfy a portion of the curbs on emissions by essentially paying others to reduce their own carbon footprint. The money spent buying offset credits from the projects in Mendocino and Maine could be used to plant additional trees or take other steps to keep the forests healthy so they can soak up more carbon.

Some environmentalists complain that offsets let companies buy credits for emission reductions that probably would have happened anyway. They also say industrial firms shouldn’t be allowed to keep polluting by sending money to someone else, particularly someone far removed from California.

The Air Resources Board has defeated lawsuits aimed at blocking the use of offsets. Agency officials say offsets represent legitimate, verifiable carbon reductions. They also say it doesn’t matter where offsets occur – even thousands of miles from California – because climate change is a global issue.

Developers and brokers have been buying and selling offset credits in anticipation of the agency’s approval. The availability of offsets is expected to ease the regulatory burden on California companies, which are spending upward of $1 billion a year to comply with the state’s carbon limits.

“This action recognizes the important role forests play in fighting climate change,” said Mary Nichols, chairman of the Air Resources Board, in a prepared statement.

California forests absorb 7 percent to 8 percent of the state’s carbon emissions, according to the Nature Conservancy.

The two forestry projects are likely to be the first of many offset programs. The Air Resources Board is vetting dozens of other projects. For instance, dairy farmers across the country are offering credits for sale based on reducing emissions of methane, a major contributor to global warming.