California’s new Cap and Trade Program for Greenhouse Gas

The California Air Resources Board has just issued a press release on its new cap and trade rule for greenhouse gas. Here are some excerpts from it:

“The regulation will cover 360 businesses representing 600
facilities and is divided into two broad phases: an initial phase
beginning in 2012 that will include all major industrial sources
along with utilities; and, a second phase that starts in 2015 and
brings in distributors of transportation fuels, natural gas and
other fuels.

Companies are not given a specific limit on their greenhouse gas
emissions but must supply a sufficient number of allowances (each
covering the equivalent of one ton of carbon dioxide) to cover
their annual emissions.  Each year, the total number of
allowances issued in the state drops, requiring companies to find
the most cost-effective and efficient approaches to reducing
their emissions.

By the end of the program in 2020 there will be
a 15 percent reduction in greenhouse gas emissions compared to
today, reaching the same level of emissions as the state
experienced in 1990, as required under AB 32.

To ensure a gradual transition, ARB will provide significant free
allowances to all industrial sources during the initial period
(2012-2014).  Companies that need additional allowances to cover
their emissions can purchase them at regular quarterly auctions
ARB will conduct, or buy them on the market.”

Cap and Trade is not new to California. There has been a similar program for NOx and SOx for some time.

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One response to “California’s new Cap and Trade Program for Greenhouse Gas

  1. Pingback: California's new Cap and Trade Program for Greenhouse Gas … | Trade Programs

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