Item 18 - Appeal Application Nos. 2023-02 and 2023-03 for Cabrillo Town Center project

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CARB adopted its 2022 Scoping Plan update on December 15, 2022 that lays the groundwork to achieving carbon neutrality statewide by 2045. The 2022 Scoping Plan is designed to reduce GHG emissions 85 percent below 1990 levels by 2045. Most reductions would come from conversion from combustion -based industries and technologies to electricity. While Statewide programs calling for electrifying the vehicle fleet and energy sources would account for the vast majority of GHG reductions needed by 2030, local actions are needed to supplement these. The Scoping Plan recommends City's develop local Climate Action Plans (CAPS) that are consistent with the Scoping Plan's GHG reduction goals, incorporate State -level GHG priorities into processes for approving land use projects, implement mitigation measures as needed to reduce GHG emissions from developments, and leverage opportunities for regional collaboration. Cap -and -Trade Program. The original Climate Change Scoping Plan identified a cap -and -trade program as one of the strategies for California to reduce GHG emissions. Under cap -and -trade, an overall limit on GHG emissions from capped sectors is established, and facilities subject to the cap can trade permits to emit GHG emissions within the overall limit. The Program is designed to reduce GHG emissions from major sources, such as refineries and power plants, (deemed "covered entities"). "Covered entities" subject to the Cap -and -Trade Program are sources that emit more than 25,000 metric tons CO2e (MTCO2e) per year. Triggering of the 25,000 MTCO2e per year "inclusion threshold" is measured against a subset of emissions reported and verified under the California Regulation for the Mandatory Reporting of Greenhouse Gas Emissions (Mandatory Reporting Rule or MRR). Under the Cap -and -Trade Program, CARB issues allowances equal to the total amount of allowable emissions over a given compliance period and distributes these to regulated entities. Covered entities are allocated free allowances in whole or in part (if eligible) and may buy allowances at auction, purchase allowances from others, or purchase offset credits. Each covered entity with a compliance obligation is required to surrender an allowance for each metric ton CO2e of GHG they emit. The Cap -and -Trade Program provides a firm cap, ensuring that the 2030 statewide emission limit will not be exceeded. An inherent feature of the Cap -and -Trade program is that it does not guarantee GHG emissions reductions in any discrete location or by any source. Rather, GHG emissions reductions are only guaranteed on a cumulative basis. As summarized by CARB in the First Update: The Cap -and -Trade Regulation gives companies the flexibility to trade allowances with others or take steps to cost-effectively reduce emissions at their own facilities. Companies that emit more have to turn in more allowances or other compliance instruments. Companies that can cut their GHG emissions have to turn in fewer allowances. But as the cap declines, aggregate emissions must be reduced. For example, a covered entity theoretically could increase its GHG emissions every year and still comply with the Cap -and -Trade Program if there is a commensurate reduction in GHG emissions from other covered entities. Such a focus on aggregate GHG emissions is considered appropriate because climate change is a global phenomenon, and the effects of GHG emissions are considered cumulative. Cabrillo Town Center Greenhouse. as ec PAGE 18 City of Santa Ana 10/3/2023 July 2023