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North American Compliance Carbon Markets 31 With the program over-supplied, and demand for allowances and offset low, regulated enti- ties in RGGI are likely to have minimal demand in the near future for airport offset credits. No airports or airport-owned facilities currently come under the direct compliance umbrella of RGGI. Compliance costs from regulated power producers will likely be passed through elec- tricity purchases to end-users such as airports; however, given current low pricing levels, the impacts in the short term are expected to remain minimal. 3.1.2 California Assembly Bill 32 California passed the California Global Warming Solutions Act in 2006, which is commonly referred to as Assembly Bill 32 (AB 32). AB 32 requires the California Air Resources Board (ARB) to develop a GHG reduction and mitigation plan through 2020. On December 16, 2010, ARB voted 9 to 1 in favor of cap-and-trade program rules solidifying a 5-year process that began with the passage of the landmark climate change legislation, California AB 32. The cap-and-trade program is expected to begin in 2013 for electricity generators and indus- trial facilities, while fuel suppliers will come under the cap in 2015. Compliance periods will occur in 3-year blocks, with the exception of the first compliance period, which will only encom- pass 2013 and 2014. The first allowance "true-up" will be in 2015 when regulated entities will be required to retire allowances and a limited amount of offset credits, if desired, for their 2013 and 2014 emissions. The program will require electricity-generating facilities, industrial facilities, and suppliers of natural gas and other fuels to account for their emissions (downstream emissions in the case of fuel suppliers) each year. The rule enumerates ten specific industrial processes, along with facil- ities that generate their own electricity, and generally includes facilities with stationary fossil fuel combusting units with emissions in excess of 25,000 tonnes of CO2e (EPA--California, Air Resources Board n.d.). While the enumerated processes identify processes and operations specif- ically designed to be covered by the program, any facility with emissions greater than 25,000 tonnes of CO2e could be covered. Thus, airports in California with stationary emissions in excess of 25,000 tonnes of CO2e may be regulated should the rules be adopted in their current form. As regulated entities anticipate future compliance requirements, the market for offset credits in California has already started to develop. The following are four offset project types expected to be eligible in California: Urban Forestry, Ozone Depleting Substances Projects, Livestock Manure Projects, and Forestry Projects. AB 32 was designed to eventually be implemented with a federal or regional cap-and-trade pro- gram. California was an original partner of the Western Climate Initiative (WCI), and would likely merge with other states and provinces should enough partner jurisdictions agree to participate. 3.1.3 Western Climate Initiative In 2007, the governors of Arizona, California, New Mexico, Oregon, and Washington began working toward the establishment of a regional cap-and-trade program to regulate GHG emissions in the region. The governors of Montana and Utah, and the premiers of British Columbia, Man- itoba, Ontario, and Quebec, later joined the effort to collectively form the WCI.