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Cap-and-Trade Proposal Released by California

The California Air Resources Board (CARB) has released its proposed greenhouse gas (GHG) cap-and-trade regulation, set to start in 2012, ahead of the Proposition 23 vote on Tuesday that will decide the fate of the state’s GHG emissions law, reports Bay Citizen.

The proposed regulations are authorized by AB 32, the state’s global warming law. If Prop. 23 passes, AB 32 will postponed until the state unemployment rate reaches 5.5 percent for four consecutive quarters, which also means the cap-and-trade program will be put on hold, reports Bay Citizen.

The cap-and-trade program will apply to about 85 percent of GHG emissions in the state from 360 businesses, reports Bay Citizen. Those industries impacted include large industrial emitters, the electricity sector and fuel distributors.

The cap-and-trade rules would place a limit, or cap, on GHG emissions for the state that would decline over time, reports The Wall Street Journal.

Aimed at helping the state meet its target goal of reducing GHG emissions to 1990 levels by 2020, the emissions cap will decline approximately two percent a year from 2012 to 2014 and about three percent a year after 2015, reports Bay Citizen.

Companies could also purchase carbon credits, or offsets, to meet the required emission cuts, according to The Wall Street Journal.

Companies could use the offsets to meet up to eight percent of their “compliance obligation,” which is up from four percent proposed by CARB earlier this year, according to the CARB report (PDF), reports Bloomberg.

The report also states that between 2012, the first year of the proposed cap-and-trade program, and 2020, “a maximum of 232 million offset credits may be used,” with each offset credit representing one metric ton of carbon dioxide, reports Bloomberg. The offsets will be approved by the Los Angeles-based Climate Action Reserve.

The accounting system meets both local industry and U.S. Environmental Protection Agency’s greenhouse-gas accounting requirements, reports The New York Times.

Proposition 23 is largely funded by Texas oil giants Valero and Tesoro and would, opponents of the measure say, essentially kill AB 32.

CARB will hold its final vote of the cap-and-trade program on December 16.

California also is working with six other western states and four Canadian provinces through the Western Climate Initiative (WCI) to design a regional cap-and-trade program.

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5 thoughts on “Cap-and-Trade Proposal Released by California

  1. This prop 23 doesn’t make sense to me or most voters, if it passes how will it save jobs ?
    Won’t it create jobs in the renewable sector ?
    or the emissions corrections enforcement and sequestering pollution at the problem plants ?
    Besides how are they going to purchase additional green credits if it puts a hold on building new renewable resources ?
    The setting aside of the AB32 will keep more jobs and cleaner air from developing sooner.
    We can go several weeks without food, several days without water, and several minuets without air, but without new progress we can’t go anywhere !
    There were 27,000 people at the Solar power 2010 conference at the convention center last month.
    How many people were at the oil industry show ?

  2. While I believe that a market mechanism is the best way to achieve the reductions in green house gas emissions that society wants, putting the California Air Resources Board in charge of such an effort will doom it for sure. CARB has demonstrated itself to be an objective oriented agency that plays fast and loose with science. This is not the sort of activist agency that is capable of progress.

  3. I used to live in California and I certainly hope this issue is getting the appropriate amount of media coverage out there. Now is not the time to be retreating on progressive climate policy with Republicans like Doc Hastings, who has a dismal voting record when it comes to clean energy (http://www.ontheissues.org/House/Doc_Hastings.htm#Energy_+_Oil) poised to take over the House Natural Resources Committee.

    Carbonfund.org is the leading provider in carbon offsets and has seen a number of large corporations sign up to offset their carbon footprint. The market is on board — we don’t need politicians pushing climate policy backwards.

  4. Encouraging increased energy efficiency will not only reduce emissions, but it will also increase these companies profit margins.
    You would think that these building owners and companies would want both.
    In California there is so much money available thru the utility companies, that doing these energy efficiency measures in most cases does not even cost these companies much money.

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