Offsetting emissions are credits created by another business that reduces its emissions. Currently, in the Chicago nonattainment area, a business must purchase 1.3 tons of offsets for each 1 ton of emissions it will generate. Under this project, businesses which locate in specially designated development zones will be given an alternative method of complying with the offset requirement. Businesses locating in development zones would draw on the bank and avoid the expense of having to purchase emissions offsets elsewhere. In addition to providing economic benefits for businesses, this project will help rejuvenate city neighborhoods and reduce sprawl with its associated traffic and air pollution.
Environmental benefits accrue in a number of ways.
Before emissions reductions may be used for this project, the state must demonstrate that it meets the one-hour ozone standard. Forty percent of the emissions reductions generated will be retired, while the remainder will be available for sources to use in lieu of obtaining offsets. Therefore, the emissions reduction under this project will be greater than the 1.3 to one reduction currently required. By creating an incentive to generate emission reductions, an increased number of these activities will likely be funded and carried out. Businesses are given flexibility to use alternative methods of complying with the offset requirement, while Chicago is given the flexibility to use the growth allowance to entice sources to have locate in development zones.