The Nickel Report

The South Coast Air Quality Management District’s (SCAQMD or the District) Regional Clean Air Incentives Market (RECLAIM) made history as California’s first emissions cap-and-trade program. But the District’s decision to sunset the program has resulted in significant uncertainty surrounding RECLAIM’s transition for local communities and industry alike.

Widely acclaimed at its 1993 inception, the program was intended to promote more efficient emissions reductions by allowing facilities to meet their annual cap either by adopting pollution controls directly or by purchasing RECLAIM trading credits (RTCs) from other facilities able to install controls at lower cost and achieve emissions below their caps. In its early years supporters praised RECLAIM as a success, pointing to significant reductions across the South Coast Air Basin. But in more recent years, the US Environmental Protection Agency (EPA) and other stakeholders criticized RECLAIM as falling short of expectations, pointing to periods of RTC price spikes reducing the program’s coverage and a subsequent glut of RTCs from plant closures that critics claim lowered the incentive for pollution reductions at remaining RECLAIM facilities.

As noted in previous blog posts, Assembly Bill 617’s (AB 617) Community Air Protection Program (CAPP) is limited in effect to specific, named communities included in it. Thus, stationary sources not located in a CAPP included community are not regulated by CAPP. However, AB 617’s new requirements are not limited to CAPP. AB 617 also requires the California Air Resources Board (CARB) to develop new regulations for criteria pollutant and toxics emissions reporting. The new regulation, titled “Regulation for the Reporting of Criteria Air Pollutants and Toxic Air Contaminants” (CTR Regulation) is not yet finalized, but the current draft will apply to stationary sources throughout California, regardless of whether they are located in a CAPP community.

The implementation of California’s ambitious Assembly Bill 617 (AB 617) is well under way, but it is still very uncertain whether it can or will achieve its intended outcome. Despite the long process to select the initial list of communities to be included in the in the first year of CARB’s Community Air Protection Program (CAPP) (CARB’s AB 617 implementation program), the hard work to ensure AB 617 is a success remains—namely the development and implementation of the emissions monitoring/reduction plans in the selected disadvantaged communities. In the end, the biggest impediment to AB 617’s successful implementation might be the law’s own requirements, specifically its accelerated implementation schedule, which may not provide California’s air quality management districts (air districts) with enough time to achieve the law’s goals.

When California Assembly Bill 617 (AB 617) was signed into law, California ambitiously announced a new “community focused” strategy to improve air quality in California. AB 617’s stated goal is to improve air quality in environmental justice communities through local, community-specific strategies focused on the individual needs and issues particular to each community. The development and implementation of this “community focused” strategy is largely the responsibility of California’s local air quality management districts (AQMDs) because AB 617 places new, explicit responsibilities on AQMDs so that they take the lead in improving the air quality in their environmental justice communities.