The South Coast Air Quality Management District is the air pollution control agency for what is known as the South Coast Air Basin which includes all of Orange County and major portions of Los Angeles, Riverside and San Bernardino counties.  SCAQMD facilitates compliance with the Federal Clean Air Act and the California Clean Air Act, and develops regulations designed to achieve these public health standards by reducing emissions from business and industry.

Sources that emit greater than 4 tons/year of NOx, VOC, SOx, or PM10 are required to offset emissions using emission reduction credits.  The district is divided into two different zones, Coastal and Inland. Coastal Facilities can only purchase credits from Coastal regions, but Inland facilities can source credits from either Inland or Coastal areas. Current New Source Review (NSR) requirements apply to both individual permits and entire facilities, and facilities with a net increase in emissions are required to offset the emission increase by use of Emission Reduction Credits.

In 1993 SCAQMD also enacted the Regional Clean Air Incentives Market Program (RECLAIM) a market-based cap and trade program to reduce ongoing air pollution from stationary sources.  At the outset of the program, firms regulated under RECLAIM received trading credits known as RTCs (RECLAIM Trading Credits) equal to their emissions of Nitrogen oxides (NOx) and Sulphur oxides (SOx).  Those allocations have been reduced over time to achieve reductions. Facilities regulated under the RECLAIM Program are currently being transitioned to a command-and-control regulatory structure requiring Best Available Retrofit Control Technology (BARCT). AB 617 requires the implementation of BARCT by these facilities, must occur no later than December 31, 2023. This process is often referred to as the sunset of the RECLAIM program.