California s Compliance Offset Program

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California’s Compliance

Off

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Verifier Requirements

Offset Program

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California Air Resources Board April 10, 2012

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Role of Offsets

 Entities may use up to 8% offsets for compliance in the cap-and-trade program

 Sources of compliance offsets

I d di l b C lif i Ai R B d

 Issued directly by California Air Resources Board

 Offsets issued by linked regulatory programs*

 Western Climate Initiative

 Sector-Based Credits*

 REDD

* Subject to future rulemaking and stakeholder process

(3)

General Offset Criteria



Reductions must meet AB 32 criteria



Reductions must meet AB 32 criteria

 Real, additional, quantifiable, permanent, verifiable and enforceable

 Additional - beyond regulation or would otherwise occur



Offsets must result from ARB Board adopted compliance offset protocols



Offset credits cannot be issued for GHG emission activities under the cap

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Compliance Offset Protocols

 Forestry Urban Forestry Ozone Depleting

 Forestry, Urban Forestry, Ozone Depleting Substances, and Livestock Digesters

 Originally developed for voluntary offset marketOriginally developed for voluntary offset market

 Modified by ARB for compliance offset market

 Considered regulatory documents

 Future Protocol Development

 Coordinate with WCI partnersCoordinate with WCI partners

 Develop internally or under contract

 Must be approved by the Board after a stakeholder y process

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Verification Verifiers and Offset

Verification, Verifiers, and Offset

Project Registries

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Offset Verification and

Verifier

Accreditation



AB 32 requires regulatory verification for all



AB 32 requires regulatory verification for all reductions used for compliance

 Includes ARB issued offsets and early actionIncludes ARB issued offsets and early action



Regulation includes third-party verification

 B d ISO 14064

 Based on ISO 14064

 Expanded on requirements for Mandatory GHG Reporting

 Strict conflict of interest requirementsStrict conflict of interest requirements



ARB will accredit third-party offset verifiers

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Verifier Accreditation



Bachelors degree in science, math, statistics,Bachelors degree in science, math, statistics, economics, auditing or



Work experience or other personal



Work experience or other personal

development activities that provide the necessary skills

necessary skills



Two years experience demonstrating the technical skills to conduct verifications

technical skills to conduct verifications



ARB approved training and pass an exit exam

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Lead Verifier Accreditation



Meets the requirements for a Verifier and



Meets the requirements for a Verifier, and



Accredited verifier for two years with

three verifications, or



Four years as project manager or lead



Four years as project manager or lead

person



Developing GHG or air emissions inventories



Developing GHG or air emissions inventories



Environmental data or financial auditor

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Offset Project Specific Verifier



Meet verifier or lead verifier requirements



Meet verifier or lead verifier requirements



Two years professional experience in

sector or



Verifier in good standing with CAR and



Verifier in good standing with CAR and

two project verifications



ARB approved training and pass exit

exam

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ARB Accreditation



Application will be available by April 20thApplication will be available by April 20th



Approved applicants will be eligible to attend the verification training

the verification training



Executive Officer (EO) will grant or withhold accreditation within 45 days

accreditation within 45 days



Accreditation is valid for three years



EO must be notified of any corrective action in other GHG programs.

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Verifier Training

 In process of awarding contract to Future Perfect  Previous CCAR offset verifier training

 Previous ARB verifier training  6 M d l 1 f i t i

 6 Modules + 1 for registries

 General Verification Principles

 ARB Offset Verification Requirements  U.S. Forest Projects

 Urban Forest Projects  Livestock Projectsj

 Ozone Depleting Substances Projects  *Registry Services

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Verifier Training

 Training and exams will take 5 daysg y

 Includes two specialties

 Can return to take other specialties

 Anticipated Cost $2000-$3000

 3 Courses minimum starting late Spring/Summer

 P i tt d ti i ti d

 Passage requires attendance, participation and

≥70% exam score for each module

 Do not have to attend General Verification PrinciplesDo not have to attend General Verification Principles if current ARB Mandatory Reporting accreditation

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Verification Body (VB)

A

dit ti

A li ti

Accreditation Application



List of all verification staff and a description ofList of all verification staff and a description of their duties and qualifications



A list of judicial proceedings with an j p g explanation.



Documentation of four million dollars of liability y insurance



Policies and mechanisms in place to prevent conflicts of interest

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Rotation of Verification Bodies



The same verifier may only verify six



The same verifier may only verify six

years of data



Three years must pass before previous



Three years must pass before previous

verifier can be used again

Th

i

d



The six year rotation requirement does

not apply to early action verifications.

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C fli t f I t

t R

i

t

Conflict of Interest Requirement



Applies to VBs, and verifiers



Before beginning, a self-evaluation of its

conflict of interest must be submitted to

the Offset Project Operator (OPO) or

Authorized Project Designee (APD), and

Off

(O

)

ARB or the Offset Project Registry (OPR)

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Self Evaluation

Self-Evaluation



Identification of conflict of interest as



Identification of conflict of interest as

high, low, or medium



Identification of previously provided offset

verification



Identification of any non-offset verification

services



Identification of other potential conflicts

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Monitoring Conflict of Interest

 VB must monitor and disclose any potential conflict f i

of interest

 VB must monitor arrangements or relationships for one year

one year

 Notify ARB or the OPR of any contracts

 The verification body must notify ARB or the OPRThe verification body must notify ARB or the OPR of any emerging conflict of interest during

verification

 Medium risk and mitigatable - continue to provide offsetMedium risk, and mitigatable continue to provide offset verification

 If medium or high risk, and not mitigatable - can NOT

continue to provide verification services

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Notice of Offset Verification

S

i

(NOVS)

Services (NOVS)



VB must submit an NOVS to ARB and OPRVB must submit an NOVS to ARB and OPR

 10 days before beginning service

 ARB may approve shorter waity pp

 Allows ARB staff time to schedule an audit



Includes offset project and VB staff information



Includes offset project and VB staff information



VB must notify ARB in writing of any changes

d d t COI lf l ti i t l

and update COI self evaluation appropriately

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Program Design Elements to

Support ARB’s Oversight Role

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Off t

V ifi

Offset

Verifiers



ARB is notified before offset verification beginsARB is notified before offset verification begins to plan its audit and oversight activities



ARB staff will conduct site visits and desk



ARB staff will conduct site visits and desk reviews



Accreditation may be suspended or revoked if in non-compliance



These activities are supplemented by additional audits conducted by OPRs

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Offset Project Registries

 OPRs may provide the following administrative y p g functions:

 Facilitate offset project listing, reporting, and verification

 OPRs must conduct supplemental audits of projects listed using an ARB compliance offset protocol

 OPRs must provide an annual report to ARB with information relating to offset projects and findings related to supplemental offset verification audits related to supplemental offset verification audits

(22)

Offset Project Registries



ARB has audit and oversight authority of OPRsARB has audit and oversight authority of OPRs



OPRs must make specific information publicly available for program transparency

available for program transparency



Required to provide project information periodically to ARB



Approval may be modified, suspended, or pp y , p , revoked if not in compliance

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 May provide guidance when no clear requirements in y p g q regulation, protocol or guidance

 Cannot approve variances C

 Cannot interpret the regulation

 If advice given by the registries is not clearly supported

b th l ti t l id d t

by the regulation, protocol or guidance documents,

verifiers and project operators should consult with ARB

I t id i b i t ld lt i

 Incorrect guidance given by a registry could result in non issuance of credit by ARB

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Additional Information



Cap-and-Trade ProgramCap and Trade Program

http://www.arb.ca.gov/cc/capandtrade/capandtrad e htm

e.htm



Join the cap-and-trade listserve at:

http://www.arb.ca.gov/listserv/listserv_ind.php?list name=capandtrade p

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Compliance Offset Contacts

Mr. Greg Mayeur, Manager (Offset Program Implementation) [email protected]

Ms. Brieanne Aguila, Lead Staff [email protected]

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Q

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California s Compliance Offset Program