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Quiz: What's the difference between LEED credits, prerequisites and points?

August 2, 2017
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Credits, prerequisites and points—achieving LEED certification involves a lot of components. But it's not as complicated as it sounds. These elements all work together to help you certify your project. 

Do you know the difference between points, credits, and prerequisites? Take our brief quiz to see how your LEED certification knowledge stacks up against that of other green professionals:

In a recent series, we broke down the prerequisites, credits and points for our different rating systems and project types, with easy-to-follow tables.

Learn about LEED BD+C points

Top architects in green building

August 2, 2017
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With Greenbuild 2017 just over three months away, now is the perfect time to celebrate the success of just a few of the green building movement’s most innovative architecture and design firms. We hope their work in LEED and SITES inspires you, as you prepare to come to Boston.

ZGF Architects

ZGF Architects considers stewardship of both the built and natural environment a core principle of their business. Masters of designing for integrated functionality, aesthetics and sustainability, ZGF’s projects are known for their ability to transform client needs into an experience that transcends expectations.

The Clif Bar Headquarters in Emeryville, California, achieved LEED Platinum for Commercial Interiors in 2012. The multi-use office space is housed in a former World War II valve factory. Making strategic use of the natural light spilling down from the clerestory windows and incorporating four interior courtyards, it is an ideal workspace for nature enthusiasts. With bikes hanging from the rafters as decoration, and more than 12,000 board feet of reclaimed wood, the space is at once elegantly natural and adventurous.

Clif Bar headquarters

Photo Courtesy of Peter Prato/Clif Bar & Company.

James Corner Field Operations

The firm behind sites that are quickly becoming iconic examples of landscape design, like The High Line in New York, James Corner Field Operations weaves together familiar and foreign elements to create places that defy classification. The firm believes in designing urban spaces with people in mind. Working with existing natural elements rather than attempting to control them, the Field Operations team coaxes out the best sensory experience out of every location.

The Woodland Discovery Playground of Shelby Farms Park in Memphis, Tennessee, was one of the first projects to achieve SITES certification. Built on a former greyfield, the playground encourages children to engage with their environment and with each other. Located on the edge of a wooded area, the playground is integrated into its natural surroundings, providing a sense of flow that is rare in constructed outdoor public spaces. The playground reflects best practices in sustainable landscape architecture as well as child development.

Photo Courtesy of James Corner Field Operations.

Michael Maltzan Architecture

Michael Maltzan Architecture (MMA) operates with a fundamental belief that the built environment shapes our experiences and interactions. The firm envisions urban and public spaces that alter perceptions, and using space and design to engage entire communities, MMA’s body of work represents a fresh way of looking at architecture.

In 2016, MMA completed the Crest Apartments, a 64-unit affordable housing community with shared social spaces designed for the Skid Row Housing Trust. The project, which houses formerly homeless veterans, is designed to encourage interaction and the provision of support services to reduce the risk of reversion to homelessness.

The project achieved LEED Platinum under the LEED BD+C Multifamily Midrise adaptation in early 2017. Prioritizing natural lighting, energy efficiency and healthy materials, MMA created a space that supports the health and well-being of its residents.

Green building tours at Greenbuild

Want to see great examples of creative, sustainable architecture in the Boston area? Check out the Greenbuild green building tours on Mon., November 6; Friday, November 10; and Sat., November 11. You can explore parks, sports venues, neighborhoods and campuses, to name just a few.

Register for Greenbuild

Attend the 2017 Commercial Real Estate Forum (USGBC Colorado)

August 1, 2017
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The National Western Center (NWC) and Colorado State University have embarked on an expansive, 20-plus-year redevelopment of the 250-acre campus. It is one of six portfolio projects that the City of Denver collectively refers to as the North Cornerstone Collaborative. According to the North Cornerstone website, the goal is to coordinate the six portfolio projects under way in these neighborhoods to build a better, greener and more connected North Denver.

At this year’s Commercial Real Estate Forum, USGBC Colorado will explore how the Ethic of Regeneration is being used to guide all planning, design, construction and operational components of the NWC redevelopment plan. Regenerative Development is defined as the process of cultivating the capacity and capability in people, communities and other natural systems to renew, sustain and thrive.

People and communities are at the center of regenerative development, so in the NWC Guiding Principles, you will find a requirement to create net zero districts for energy, waste and water, as well as the directive to create programming that supports neighborhood identity, the local economy, job opportunities and economic development. 

Attend the forum on Tues., August 15 from 7:30–9:30 a.m. to learn more about upcoming opportunities to get involved and to converse with NWC Partners. After a light breakfast and networking, a facilitated panel discussion will be moderated by Mike Biselli, President of Catalyst Health Tech. Attendees will have a chance to ask questions during a Q&A session.

Register for the forum

Building resilience: Adapting to a changing climate (USGBC Northern California)

August 1, 2017
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In this series, speakers from USGBC Northern California’s GreenerBuilder conference, held July 13, 2017 at the Zero Net Energy Center in San Leandro, share insights from their sessions. Interested in supporting GreenerBuilder 2018 as an event sponsor or exhibitor? Contact Brenden McEneaney.

Climate change is real and the impacts are here. In the last five years alone, the U.S. faced climate disasters causing $240 billion in CPI-adjusted losses. While new buildings are being constructed to handle the rise in extreme weather events, the existing building stock is left vulnerable to changing climate conditions. A study by the Multihazard Mitigation Council shows that every dollar invested in mitigation efforts can save an average of four dollars in damages.

Beyond the value of avoided risk, resilient buildings provide many benefits that increase their value to both owners and tenants. Resilient buildings often have:

  • Less risk to business continuity due to reduced downtime
  • Potential for lower insurance premiums
  • Reduced operating expenses resulting from energy efficiency improvements
  • Improved occupant comfort and safety

In addition to owner and tenant benefits, resilient buildings can add value to the community by serving as a place of refuge during an emergency. Although investing in resilience and adaptation can be a daunting task, it’s a worthwhile effort.

DNV GL’s Building Resilience Assessment tool, B-READY, helps building owners and property managers translate climate-related risks into actionable resilience strategies. The resilience assessment first looks at the frequency and intensity of climate-related events at the building site, then how those events will impact the building systems and the people within the building.

Once the risk to the building is determined, the capacity of the building is assessed. The capacity is the ability of the building to withstand the impacts from the climate-related events and continue functioning. To help building owners prioritize their investments, each measure is assigned a "Magnitude of Impact" rating based on the relative importance of that measure. Utilizing the hazard frequency and intensity, magnitude of impact and building capacity, a resilience index and customized recommendations are produced.

When it comes to retrofits, resilience isn’t a one-size-fits-all model. Certain retrofits will make more sense in some buildings than others, which is why understanding the building’s characteristics in relation to climate hazards can help building owners prioritize their investments. When considering the costs and benefits of resilience measures, three-year simple payback isn’t the best way to assess payback. Some measures may have a longer simple payback, but offer significant benefits and long-term risk-avoidance. Bundling measures together can help offset the longer payback of some of these measures.

In addition to choosing the right approach for financial analysis, framing is key. When trying to convince others to act on resilience and mitigation, understanding their needs, values and mindset can help you frame the suggested retrofits in most persuasive way, whether that be risk avoidance, sustainability, energy efficiency or cost savings. In the end, it’s all for the same mission: creating safer and more sustainable buildings that will weather the storm. 

Virginia leaders stay committed to the Paris Climate Agreement

July 31, 2017
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Local and state leaders across Virginia are continuing to commit support for the principles of the Paris Climate Agreement.

This July, AIA Virginia released a statement reaffirming its support for “policies, programs, and incentives that encourage energy conservation in the built environment.” The Virginia Energy Efficiency Council (VAEEC), of which USGBC is a member, notes that the Commonwealth of Virginia; the mayors of Alexandria, Charlottesville and Richmond; and the chair of the Arlington County Board have all signed on to the We Are Still In open letter, expressing their intention to remain engaged with the international community to combat global warming. Other signatories in Virginia include members of the business community and several universities.

USGBC supports the efforts of VAEEC to bring more energy-efficient policies to the state. The USGBC Greater Virginia community recently highlighted several local governments taking a leadership role in providing sustainability incentives.

In addition, USGBC is a signatory in the We Are Still In open letter, and encourages its members to continue to drive innovation in sustainable building. With tools like Arc to more comprehensively track buildings' carbon emissions, building designers, owners and developers can make smarter choices to ensure a healthy and prosperous future for all.

Get involved

California Policy Corner: Big news for climate action and codes

July 31, 2017
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The state legislature’s July 21 recess created a crunch time for policymaking for much of June and July, during which USGBC worked hard to advance bills at the state level and promote our green building message. A major measure to pump billions of dollars into transportation upgrades, SB 1, consumed much of the legislature’s time in June. Now that the measure has passed, the California Transportation Commission is hosting public hearings on the implementation and allocation of funds.

Of course, some of the biggest news from this past month is that the state’s landmark cap-and-trade program has been given new life through a bill package that Gov. Jerry Brown signed last week. The ceremony for AB 398 took place on Treasure Island, a community that earned Platinum certification under the LEED v4 for Neighborhood Development: Plan rating system. USGBC also kicked off an article series on California cap and trade. 

The last several weeks have also included ongoing advocacy in support of our nine priority bills mentioned in last month’s post. All but SB 740, related to on-site water reuse, are still active and will be considered after the recess, when we expect a major focus of the legislature will be on addressing the state’s urgent need to address housing affordability.

We paused in June to recognize two state officials who are making a difference through their outstanding leadership to advance our issues. We were honored to add Sen. Scott Wiener and CEC Commissioner Andrew McAllister to the Green Hard Hat Award honor roll.

CALGreen projects

Amid a flurry of exciting conversations and presentations at our GreenerBuilder conference this month, there was emphatic applause for the next step in our ongoing work on LEED and building codes. With the support of Wes Sullens, USGBC's Director of Codes Technical Development, USGBC President and CEO Mahesh Ramanujam announced that new commercial projects built to California’s robust building codes are now pre-approved for significant streamlining of fundamental LEED Building Design and Construction (BD+C) requirements. Qualifying projects will be able use code compliance documentation in order to satisfy all LEED v4 BD+C prerequisites and earn 6 points.

After a report on barriers and opportunities for green codes in California was released in 2015, USGBC launched an effort to build off the statewide CALGreen code by streamlining the documentation of a handful of credits for projects in California. The current effort updates our past work to line up with LEED v4 and Title 24-2016, and will go further to reduce overlapping efforts to document green building compliance. 

Upcoming advocacy events

August 4: Join the USGBC Los Angeles Chapter and the Los Angeles Better Buildings Challenge for the next in a series of workshops to help building owners comply with the city's new Existing Building Energy and Water Efficiency (EBEWE) Ordinance. The ordinance requires multifamily, commercial and government property owners served by the L.A. Department of Water and Power to benchmark, report on and improve energy and water performance.

September 22: Green building policy and advocacy is also on the agenda at the upcoming San Diego Green Building Conference and Expo.

September 2018: Mark your calendars for next year—Gov. Brown will be hosting a Global Climate Action Summit in San Francisco.

Whether at a conference or in your everyday interactions, USGBC members are encouraged to help us share with others what we know from our experience: that green buildings, infrastructure and communities offer elegant and holistic solutions to many of California’s pressing challenges—from housing affordability to climate action to water conservation.

See more California events

Materials strategies in LEED v4

July 31, 2017
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The topic of materials is one that spans every phase of a building’s life cycle. It includes considerations about construction waste, specifying materials for the building’s structure in the design and construction phase, making green cleaning choices while the building is in use and determining what happens to the building in the demolition phase.

Quick facts about construction waste:

  • Construction and demolition waste constitutes about 40 percent of the total solid waste stream in the United States and about 25 percent of the total waste stream in the European Union.
  • In aggregate, LEED projects are responsible for diverting more than 80 million tons of waste from landfills, and this volume is expected to grow to 540 million tons by 2030.

Materials decisions are impacted by an array of stakeholders who work with the built environment and those who support it, as well as by those who work, learn, live and play within those buildings.

LEED projects divert more than 80 million tons of waste from landfills

What LEED does with materials

Since its initial launch, LEED has always addressed materials, and the newest version of the rating system is no different. LEED v4 brings a shift that goes beyond materials decisions focusing on single attributes and moves the market toward conversations about optimizing environmental, social and health impacts and gaining a better understanding of the trade-offs.

The LEED Building Design and Construction materials credits and prerequisites include:

  • Prerequisite: Storage and Collection of Recyclables
  • Prerequisite: Construction and Demolition Waste Management Planning
  • Prerequisite: PBT Source Reduction—Mercury
  • Credit (5–6 points): Building Life-Cycle Impact Reduction
  • Credit (2 points): Building Product Disclosure and Optimization—Environmental Product Declarations
  • Credit (2 points): Building Product Disclosure and Optimization—Sourcing of Raw Materials
  • Credit (2 points): Building Product Disclosure and Optimization—Material Ingredients
  • Credit (1 point): PBT Source Reduction—Mercury
  • Credit (2 points): PBT Source Reduction—Lead, Cadmium and Copper
  • Credit (2 points): Furniture and Medical Furnishings
  • Credit (1 point): Design for Flexibility
  • Credit (2 points): Construction and Demolition Waste Management

The LEED Operations and Maintenance materials credits and prerequisites include:

  • Prerequisite: Ongoing Purchasing and Waste Policy
  • Prerequisite: Facility Maintenance and Renovation Policy       
  • Credit (1 point): Purchasing—Ongoing           
  • Credit (1 point): Purchasing—Lamps  
  • Credit (2 points): Purchasing—Facility Management and Renovation
  • Credit (2 points): Solid Waste Management—Ongoing
  • Credit (2 points): Solid Waste Management—Facility Maintenance and Renovation

Join USGBC at Greenbuild 2017 in Boston, India and China, to learn more about LEED and materials. In addition to educations sessions, Greenbuild in Boston and India will feature expo halls where attendees can interact with the newest and most innovative products the market has to offer.

The Boston Greenbuild event will also include a special session on LEED v4 and its materials and resources section:

Course: LEED v4 and Materials: Interactive Session

Thurs., November 9 from 5–6 p.m.

During this session, attendees will get an overview of the LEED v4 materials section, learning what has changed, what’s been added and how to implement key strategies, including reading and comparing EPDs.

Register for Greenbuild Boston

What is a green school?

July 30, 2017
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A green school is about more than curriculum, more than programming and more than bricks and mortar. It’s a school that supports global sustainability in every way. A green school begins with the future in mind, designing a learning experience for students that will prepare them to lead the world toward a healthier, cleaner, more sustainable future.

The Whole School Sustainability framework describes what successful green schools have learned about how to make this sustainability thinking stick. It explains that, in these schools, the educational program, physical place and organizational culture all support sustainability, and that each aspect of the school does its important part in making the whole picture work.

So, how do we know if it’s working? This is where the three pillars of a green school come in. While the Whole School Sustainability framework describes what a green school looks like, the three pillars of a green school explain how to measure progress. The three pillars were first introduced when the U.S. Department of Education launched the ED-Green Ribbon Schools award program in 2011. Since then, over 60 organizations have adopted the basic measurement framework that they present:

  • Reduced environmental impact
  • Increased health and well-being
  • Increased environmental and sustainability literacy for all graduates

These three pillars are the measurable success metrics for green schools, and they make a real impact on both global sustainability and individual student and teacher health.

Environmental impact

Reducing environmental impact includes reducing energy and water use, cutting back on fossil fuel used in transportation, reducing waste headed to landfill and protecting natural habitats. These actions have an effect on humans and the Earth:

  • We know that cutting energy usage in buildings reduces energy load on power plants, reducing carbon emissions and other environmental impacts of power generation.1

  • We know that cutting water usage in buildings reduces aquifer depletion,2 protects freshwater habitats and reduces the energy used to treat and transport water.3

  • We know that reducing waste going to landfill saves open land for habitat and other purposes and reduces water and soil contamination. We also know that the effort of reducing landfill waste encourages direct reuse and puts more material in the recycling stream.4,5

  • We know that reducing car trips made by a single rider cuts back on carbon emissions from transportation.6

Health and well-being

Protecting student and teacher health includes ensuring a clean and healthy indoor environment in the school, as well as providing programs and services for good nutrition and physical activity. Paying attention to health in schools has an impact on well-being and learning:

  • We know that specific aspects of indoor air quality—such as the amount of CO2, VOCs, particulates and humidity in the air—have demonstrable impacts on student learning and human health more generally.7,8

  • We know that access to clean and safe drinking water can increase water intake, which benefits overall health.9,10 We also know that lead contamination in water has demonstrable impacts on cognitive development, attention and behavior, as well as a variety of impacts on physical health.11

  • We know that exposure to daylight affects the production of important hormones that impact alertness and sleep/wake cycles.12

  • We know that increasing the number of servings of whole grains, fruit and vegetables that students eat has positive impacts on their health, well-being and ability to learn.13,14

  • We know that increasing the amount of physically active time that each student experiences during the school day can cut obesity rates and encourage positive lifetime habits.15

Environmental and sustainability literacy

Teaching students about sustainability and the environment gives them the tools they need to solve the global challenges we face now and in the future. Education that supports this type of literacy includes both curriculum and instructional practices that are interdisciplinary, place-based and rooted in the context that uniquely surrounds each student. This education impacts student understanding and action:

  • We know that increasing students’ environmental knowledge while also employing instructional practices that focus on interdisciplinary and place-based problem solving can influence behavior change toward sustainability.16,17

  • We know that students for whom the environment is a context for learning perform better on measures of general academic performance.18

References

[1] U.S. EPA, “Learn about Energy and its Effects on the Environment.”

[2] U.S. Geological Survey, “Groundwater Depletion.”

[3] U.S. EPA, Water-Energy Connection.

[4] U.S. EPA, “Reducing and Reusing Basics.”

[5] U.S. EPA, “Recycling Basics.”

[6] U.S. EPA, "Sources of Greenhouse Gas Emissions."

[7] Wyon, D. and Wargocki, P. (2007). Indoor Environmental Effects on the Performance of School Work by Children. (1257-TRP). ASHRAE.

[8] Shendell, D.G., Prill, R., Fisk, W.J., Apte, M.G., Blake, D. and Faulkner, D. (2004). Associations between classroom CO2 concentrations and student attendance in Washington and Idaho. Indoor Air, 14(5), 333-341.

[9] Patel A.I., Bogart L.M., Elliott M.N., Lamb S., Uyeda K.E., Hawes-Dawson J., et al. Increasing the availability and consumption of drinking water in middle schools: a pilot study. Prev Chronic Dis. 2011;8(3): A60

[10] Loughridge J.L., Barratt J. Does the provision of cooled filtered water in secondary school cafeterias increase water drinking and decrease the purchase of soft drinks? J Hum Nutr Diet. 2005 Aug;18(4): 281-286.

[11] World Health Organization, “Lead poisoning and health."

[12] Duffy, J.F., and Czeisler, C.A. "Effect of Light on Human Circadian Physiology." Sleep Medicine Clinics 4.2 (2009): 165-77.

[13] Harvard T. H.  Chan School of Public Health. “Vegetables and Fruits.”

[14] Bellisle, F. Effects of diet on behavior and cognition in children. Br J Nutr. 2004 Oct; 92.

[15] Harvard T.H. Chan School of Public Health. Obesity Prevention Source. “Physical Activity.”

[16] Barrat Hacking, E., Scott, B., and Lee, E. (2010). Evidence of impact of sustainable schools. Bath, U.K.: University of Bath, Center for Research in Education and the Environment. Downloaded April 16, 2010 from http://publications.teachernet.gov.uk/eOrderingDownload/00344-2010BKT-EN.pdf

[17] Percy-Smith B., et al. (2009) Exploring the Role of Schools in the Development of Sustainable Communities. Full Research Report ESRC End of Award Report, RES-182-25-0038. Swindon: ESRC.

[18] Lieberman Gerald, Hoody Linda. Closing the Achievement Gap, State Education and Environment Roundtable. 1998.

Leadership platforms: Building WELL into the future (USGBC Minnesota)

July 28, 2017
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The USGBC Minnesota community recognizes that whatever the challenges, we need the right people, tools and platforms to solve them. With increasing focus on not only reducing our environmental impact, but also improving our health and well-being, we have embraced the WELL Building Standard

Over the summer of 2017, USGBC Minnesota will feature three articles that focus on the action being taken to improve health and well-being in the built environment. Join us as we investigate this leadership platform through the lens of the Minnesota WELL Collaborative, the efforts to increase educational opportunities and achieving WELL AP credentials and a case study of one of the first projects in Minnesota registered under WELL. 

Reimagining "The 428"

From the ruins of a mid-century five-and-dime store emerges "The 428," a building for the next generation. The 428 building, originally occupied by F. W. Woolworth's in St. Paul, Minnesota, is now amid a major transformation. Commercial Real Estate Services (CRES) recently embarked on an adventure to renovate the 1950s building, which has been sitting vacant for over 24 years, into a modern industrial business hub. To create a building that is both innovative and attractive for future generation businesses, the building will be getting more than just a facelift from HDR Architects and McGough Construction.

While recognizing that a LEED certification through USGBC is the pinnacle standard in green building and energy efficiency, CRES also wants to incorporate a cutting-edge innovation to create a building that will contribute to capturing and retaining talented employees. They envision The 428 as a building of the future, not just the status quo. Although LEED is known for its focuses on energy efficiency and the environment, WELL is a new building certification that focuses specifically on the health and well-being of the occupants of the building. This is a concept in business that has started to be recognized at the design and construction stage of development.

Over an extended period, the cost of constructing a building is estimated to be only 2 percent of the cost of operations, while the cost of doing business is estimated to be 90 percent. The cost of doing business includes employee salaries, sick time, and so on. To improve employee performance, companies are incorporating employee wellness programs as part of the benefits package infrastructure.

The 428 project

Elements of wellness

The 428 will have wellness incorporated into its structure through a variety of health features recognized through the seven concepts of WELL: Air, Water, Nourishment, Light, Fitness, Comfort and Mind. These concepts focus on health and how it affects different body systems. There are several features of WELL, both visible and invisible, built into the structure.

The existing building’s heavy exterior currently has limited windows, with the exception of the storefront glass on street level and a few others on the third level. The renovated building will completely remove the current exterior and replace it with floor-to-ceiling windows on three sides to allow for ample daylight throughout the building. The design is also incorporating a fourth level and a partial rooftop annex, also with floor-to-ceiling glass, that will house a collaborative working space.

The newly renovated 65,000-square-foot building will have a communal rooftop space with planters, a wider and more accessible stairway to promote use and movement, a floor-to-ceiling curtain wall for maximum daylighting, sound-deadening glass to keep out excessive traffic noise, bike storage, repair stations and showers in the lower level. The interior lighting will respond to the daylighting of the outdoors and follow a person’s natural circadian rhythm, adjusting for the amount and color of light at the correct time of day.

The building team expects to attract tenants with a forward-thinking mindset—businesses that understand that you can increase productivity without increasing your overhead and staff, simply by creating a place of work that is comfortable and effortless to inhabit.

The 428 is slated for completion in the late spring or early summer of 2018. The project team hopes to make The 428 the first building to accomplish both LEED Silver and WELL Core and Shell compliance in Minnesota.

Workshop: The WELL Building Standard

Take a deep dive into each of three concepts for a better understanding of how the specific features will affect your design and operational processes. The preconditions of each concept will be explained, and other select features will be considered.

When: Three consecutive Mondays: September 18 and 25 and October 2, 1–5 p.m.

Where: Ryan Construction, Millwright 

Learn more and register

California legislature passes 10-year extension to cap and trade

July 28, 2017
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Success in the legislature

After weeks of negotiations in the California legislature, the Senate and Assembly passed an extension to cap and trade on July 17. This is a win for California’s climate leadership and for green building. USGBC actively supported the cap-and-trade extension, as one of the state’s key strategies to reach its SB 32 goal to reduce emissions by 40 percent from 1990 levels by 2030.

The extension package includes two bills: AB 398 extends and modifies the cap-and-trade bill that took effect in 2012 and AB 617 adds provisions for air quality control in priority areas. AB 398 was signed into law this week by Gov. Jerry Brown in San Francisco, and AB 617 was signed near Los Angeles. The modifications to cap and trade will take effect in 2020 and continue through 2030.

Learn more about how cap and trade works.

Air quality controls

To address the issue of air quality in at-risk communities, AB 617 puts the Air Resources Board (ARB) in charge of monitoring pollutants across the state and proposing pollution control technologies and community emissions reduction programs in the highest-priority locations, as well as providing grants and technical assistance.

Local air districts will not be permitted to impose additional mandates for CO2 reduction; however, they may still impose mandates for non-CO2 pollutants. Additionally, they will be responsible for planning the implementation of the technologies recommended by ARB to industrial plants and refineries, if the local communities experience pollution levels above the set limits.

The new law continues to charge ARB with allocating 1-ton allowances, some free and others via auction, to companies regulated under the cap. Although free allowances have been criticized for making it too easy for businesses to comply and for weakening the market signal, they also make it easier for in-state businesses to compete in out-of-state markets. ARB will be reducing the distribution of free allowances over time, increasing the investments in real reductions.

Carbon offsets

Another pathway for companies regulated under the cap to meet their reduction targets is through the purchase of carbon offsets. If regulated properly, however, offsets can provide valuable climate impacts and give flexibility to the cap-and-trade program. Currently, only 8 percent of any company’s total needed allowances may be achieved through offsets, which will be reduced to 4 percent in 2020 (rising back up to 6 percent in 2026 to reflect the expected increase in carbon pricing).

To encourage local pollution reduction, at least half of the maximum offsets must be through programs that directly reduce emissions in-state. The Compliance Offsets Protocol Task Force under ARB will identify acceptable programs, prioritizing ones that benefit disadvantaged, tribal and agricultural communities.

One of the discussed provisions that did not make it to the approved law is a border adjustment tax. Some argue it would create political friction and have too many logistical complications. To compromise, the bill requires ARB to report carbon leakage and submit a report to the legislature with suggestions for reduction, mentioning the possibility of a border adjustment in the future.

In the larger picture, the greenhouse gas emissions that the cap-and-trade program will save are small in comparison to global emissions. However, if the California cap and trade is successful, it will serve as a scalable and exportable model within the U.S. and, potentially, the world. 

Learn more about California's green leadership

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