California Air Resources Board Response to Item 3900 of the Supplemental Report of the 2019 Budget Act
Item 3900 of the 2019 Budget Act requires the California Air Resources Board (CARB) to submit a description of the methods, data, and key assumptions used to estimate the greenhouse gas (GHG) removal enhancements (e.g., carbon sequestration in trees) and emissions reductions for projects using the Compliance Offset Protocol U.S. Forest Projects (Protocol), under the State’s Cap-and-Trade Regulation (title 17, California Code of Regulations, section 95801 et seq.). The Cap-and-Trade Program (Program), which became effective in 2012, sets a declining cap on statewide GHG emissions to help the State meet its 2020, 2030, and longer-term emissions reduction targets. As part of the Program, emitting sources must acquire and surrender compliance instruments (state-issued allowances and a limited number of carbon offset credits) against their reported and third-party verified emissions. The Protocol is one of the eligible offset methodologies included in the Cap-and-Trade Regulation. Only those offset projects that meet the stringent requirements of the Protocol are eligible to be issued offset credits by CARB. (The Cap-and-Trade Regulation uses the term ARB offset credits to describe California-issues offset credits, and this document will refer to them as such). Emitting sources may surrender ARB offset credits, including credits from U.S. Forest Projects to meet a small percentage of their emissions compliance obligations.