2002 ANNUAL REPORT
Emission Reduction Credits

WSPA Fights US EPA on Emission Reduction Credit Process

The "double dip" discounting policy, which erodes the value of Emission Reduction Credits (ERC) was fought on several fronts in 2002. WSPA brought suit against the US Environmental Protection Agency (EPA) in Ventura County to force a policy change and provided information on its counterproductive nature in meetings with federal state and local officials.

ERCs were developed to provide an economic incentive to reduce emissions. They have economic value to firms that expedite anti-pollution measures, since the credits can be sold to less efficient firms or used to offset other emissions. The issue in the dispute is that the state discounts the ERCs when they are banked and the Federal government takes another discount when they are traded or used. WSPA argues that the double discount substantially lessens the value of ERCs and therefore the incentive to reduce emissions sooner rather than later.

WSPA has been advocating a statewide resolution of the problem while working on specific rule development in air basins of highest concern. The Association was successful in getting the Ventura County Air Pollution District and EPA to adopt language in its New Source Review Rule to address our concerns; language that will serve as the basis for negotiations with EPA in the San Joaquin Valley and Bay Area.

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