On October 29, the California Air Resources Board (CARB) released the design of its greenhouse gas (GHG) cap-and-trade program. Beginning in 2012 there will be an overall limit, or cap, on 85% of the state’s GHG emissions. Emitters such as power companies and gasoline refineries will be required to hold enough allowances (rights to emit) to match their emissions. They can comply by reducing their emissions or purchasing tradable allowances from other emitters or at state-run auctions. Companies that reduce their emissions below the allowances they hold have the opportunity to sell unused allowances. Striving to minimize negative economic impacts, CARB will give away a significant number of allowances to industries facing serious competition from states without such requirements. The program will expand to cover natural gas companies and producers of liquefied natural gas and transportation fuels in 2015.
October 29 marked the beginning of a public comment period for the program leading up to a public hearing in Sacramento, California on December 16, at which the Board will make a final decision on whether to adopt the program.
More information on U.S. regional cap and trade programs