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The California Air Resources Board Aug. 30 held a practice carbon emissions rights auction under its cap-and-trade program as a shakedown cruise before the first live auction in November. Companies covered by the program bid in the practice event for emissions rights using the Air Board’s computerized trading platform. “At this point it seems to be going well,” Air Board spokesperson Dave Clegern said in the late morning Aug. 30. He added there were few glitches and that participation by companies covered by the cap-and-trade program was fairly strong, although not complete. Following the practice session, the Air Board on Aug. 31 planned to review the results along with its independent market monitoring panel and then inform participants of the results on Sept. 4. The Air Board also plans to survey interested practice auction participants on their experience on Sept. 5 and 6. It’s expected the staff will discuss how the practice auction went at the Air Board’s Sept. 20 meeting, when the board also plans to take up any adjustments to the cap-and-trade program before initiating the November auction. If anything significant is found in reviewing the results, Clegern said the staff may issue a report before that meeting. * * * * * Two Democratic state legislators suggested Aug. 23 that the California Air Resources Board doesn’t have to go forward with its planned greenhouse gas emissions rights auction in November to meet the state’s global warming goals. Instead, they urged the Air Board to provide the rights for free. Assemblymember Henry Perea (D-Fresno) and Sen. Mike Rubio (D-Shafter) based their suggestion on an Aug. 17 analysis by the Legislative Analyst’s Office that outlined the pros and cons of auctioning emissions rights. “We need to remember our ultimate goal here is to improve our air quality by encouraging industries to invest in clean technology and I believe that can be done with 100 percent free allowance auctions,” stated Perea. The Legislative Analyst’s Office analysis pointed out that it’s not how emissions rights are distributed that matters in achieving the cap-and-trade program’s emissions reduction requirements. Instead, the office said, it’s the “declining cap” that produces the reductions. Under the program, emissions are capped from regulated sources when the program begins next year. Then the cap declines each year through 2010, when total emissions are supposed to be at their 1990 level. “We need to make sure we are exploring all alternatives to reducing greenhouse gas emissions in our state while minimizing potential economic impacts on California businesses and the jobs they create,” stated Rubio. * * * * * The California Air Resources Board plans to exempt until 2015 combined heat and power facilities at universities from complying with its carbon cap-and-trade program. In an Aug. 24 letter to Assemblymember Nathan Fletcher (I-San Diego), Air Board chair Mary Nichols wrote that “public and private entities that have taken steps to build or purchase combined heat and power facilities should be rewarded for their actions, not penalized.” Fletcher inquired about the status of universities under the greenhouse gas emissions reduction program in a letter to the Air Board on Aug. 10. Earlier this summer, universities complained about the expense of purchasing emissions rights in a cap-and-trade auction, citing increasingly tight budgets. To aid the universities, Nichols said that emissions associated with their steam and waste heat would be exempted from the program until 2015. In addition, she pledged the agency would provide “transition assistance to universities as we have done in the industrial sector.” Nichols said that requirements for the cogeneration facilities would be reassessed in a rulemaking next year. * * * * * The Obama Administration Aug. 28 finalized standards to increase fuel economy to 54.5 miles/gallon for cars and light-duty trucks by 2025. Combined with previous standards, the move is expected to nearly double the fuel efficiency compared to today’s new vehicles. The Department of Transportation estimated that the new standards will cut greenhouse gases from cars in half, plus save consumers more than $1.7 trillion at the gas pump and reduce U.S. oil consumption by 2 million barrels/day. California Air Resources Board chair Nichols lauded the development. She said the state--which already has adopted similar standards--would move to allow “the federal standard to satisfy California requirements” resulting in one national standard.

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