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Chances of Survival Improve: California Passes Cap-and-Trade Legislation

Good news: California is creating the largest cap-and-trade system in the world (outside of Europe, of course).

It gets better!

Yesterday, California's Air Resources Board passed a law that will reduce the state's greenhouse gas emissions to 1990 levels by 2020. It establishes a cap-and-trade system: Industries will now need permits for their carbon emissions, the permits can be traded among different polluters on an open market, and the total emissions allowed by the permits falls over time.


Yale's Environment 360 explains:

Under the plan, emissions from the state’s 600 biggest industrial facilities — including cement manufacturers, electrical plants, and oil refineries — would be capped in 2012, with that ceiling gradually diminishing over eight years. Mary D. Nichols, chairwoman of the Air Resources Board, said the cap-and-trade system “will help drive innovation, create more green jobs, and clean up our air and environment.” Concerned that the cap-and-trade system might inhibit the ability of California businesses to compete with companies in other states, the Air Resources Board softened the law in several significant respects. Instead of initially auctioning the permits needed to emit CO2, the board will give them out for free during the first three years, then phase in a system of purchasing emissions permits.

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TreeHugger has a few more details about the rollout:

The new regulation sets a statewide limit on greenhouse gas emissions from sources responsible for 80% of California's total emissions, covering 360 companies and 600 specific facilities in the initial phase of the program, running from 2012-2014. From 2015-2020 distributors of transportation fuels, natural gas and other fuels are brought into the scheme.

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This cap-and-trade system is going forward because California voters had the good sense to defeat proposition 23 in the November elections. California's cap-and-trade system will be the largest in the world outside of Europe's.

There are details environmentalists object to. Here's one: Companies will be able to cover 8 percent of their emissions by buying carbon offsets. That's concerning because (as my colleague Ben has explained) some carbon offsets are pretty meaningless. Also, many people would have preferred that the emissions permits be auctioned off from the start, to earn the state a little extra cash, rather than given away for free.

That said, this is good news. Even if capping emissions and trading permits isn't the best way to tackle the challenge of preserving a habitable world, California's move is a step in the right direction and an example for other states. If problems emerge with the implementation in California (as they surely will) we'll at least have something to learn from.

photo (cc) from Flickr user kevindooley

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