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Air district outlines pilot for local carbon bank to keep mitigation investments in Sacramento region
Summary
Staff proposed creating a locally governed carbon-credit pilot to provide a voluntary, CEQA‑grade mitigation option that keeps project funding and co‑benefits in the region; directors asked about past barriers, cost implications and whether credits could be used to address Vehicle Miles Traveled impacts.
Paul Philly, program manager in the Transportation and Climate Change Division, told the board the district is exploring a pilot for a local carbon bank to provide a voluntary mitigation option for jurisdictions and developers. He said the purpose is to create locally verified, defensible credits that keep mitigation funds and co‑benefits in the Sacramento region rather than sending money out of state or overseas.
"If it is successful, we could start having projects in Virginia purchase projects here, as opposed to the other way around," Philly said, describing a potential future in which the region could both create tradable credits and attract outside funds while maintaining strict verification and enforceability. He reviewed four credit types (cap‑and‑invest/regulatory, international voluntary markets, state regulatory‑grade programs and project‑level mitigation measures) and said a local bank would be designed to meet CEQA evidentiary thresholds.
Directors asked practical and legal questions. Director Serna and others noted the board adopted Rule 250 in 2010 to authorize a carbon bank but no credits were banked; staff said market evolution and earlier duplication by international voluntary markets were factors. Director Lopez Taft asked about fiscal impacts on residents and businesses; Philly said the agency aims to make mitigation options low cost and accessible and that the bank must be attractive enough for buyers or it will not be used.
Dr. Ayala reiterated that the board is discussing a voluntary option, not a new regulation. Staff said they will present a pilot in the fall that would produce at least one project and associated credits; based on pilot lessons the district could use Rule 250 or another regulatory vehicle to formalize a bank within about a year.
