California Emission Markets (RECLAIM, ERCs)
The Regional Clean Air Incentives Market (RECLAIM) is specific to the greater Los Angeles area, and was initially implemented on January 1, 1994. It requires stationary source emittors of NOx and SOx to reduce emissions each year by capping available credits, called RTCs, and allowing stackholders to trade with one another. With the cap decreasing each year, upward price trends should incentivize facilities to install control technologies and improve operating efficiencies.
The program is administered by the South Coast Air Quality Management District (SCAQMD) and is targeted at sources that annually emit more than four tons of NOx, effectively every industrial, refining, and generating facility in LA. Under this program, participants must surrender one credit for every one-pound of NOx emitted annually. Participants receive annual allocations of credits from SCAQMD based upon past peak production and existing rules and control measures. These RTCs expire each year, and the program is unique in that it does not allow banking of credits.