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

Carbon sequestration in terrestrialecosystems and geologic formations providesa significant opportunity for California toaddress global climate change. The physicalsize of its resources (e.g., forests,agriculture, soils, rangeland, and geologicformations) and the expertise in Californiaprovides a substantial foundation fordeveloping carbon sequestration activities.Furthermore, the co-benefits of carbonsequestration – such as improved soil andwater quality, restoration of degradedecosystems, increased plant and cropproductivity, and enhanced oil recovery – are significant. In fact, carbonsequestration often represents a `noregrets' strategy – implementing carbonsequestration provides multiple benefits,even without the advent of global climatechange.Nevertheless, researchers need to addressseveral issues to determine more accuratelythe potential, benefits, and costs ofsequestering carbon in California'sterrestrial ecosystems and geologicformations, as well as to identify the mostpromising sequestration methods and theiroptimal implementation. One key issue isthe type of regulatory constraints facingdevelopers of carbon sequestrationprojects: what permits are needed fordeveloping these projects? The permittingprocess may impede the penetration ofsequestration technologies into the marketif the costs (including transaction costs)of obtaining the permits are too burdensomeand costly. For example, at least ninefederal regulations and seven stateregulations will potentially influencecarbon sequestration projects inCalifornia. This paper also provides anexample of the types of permits needed fordeveloping a carbon sequestration project,using California as an example. It ispossible that a carbon sequestrationproject may have to obtain a total of 15permits (3 federal, 6 state, 6 local),before it even starts to operate. In theconcluding section, we offer some suggestedareas for research and activities forpolicy makers.