Regulatory Constraints to Carbon Sequestration in Terrestrial Ecosystems and Geologic Formations: A California Perspective

This paper looks at carbon sequestration in terrestrial ecosystems and geologic formations from a permitting perspective, using California as an example. The author argues that carbon sequestration often represents a "no regrets" strategy – implementing carbon sequestration provides multiple benefits, even without the advent of global climate change. Nevertheless, project developers may be impeded by burdonsome regulatory constraints. Specifically, the permitting process may limit the penetration of sequestration technologies into the market if the costs (including transaction costs) of obtaining the permits are too onerous and costly. For example, at least nine federal regulations and seven state regulations will potentially influence carbon sequestration projects in California. This paper provides an example of the types of permits needed for developing a carbon sequestration project. It is possible that a carbon sequestration project in California may have to obtain a total of 15 permits (3 federal, 6 state, 6 local), before it even starts to operate. In the concluding section, the author offers some suggested areas for research and activities for policy makers.