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.