News and analysis about energy in California with an eye toward renewables.

California's Cap And Trade Law Takes Effect

You've got to pay to pollute in California, starting now | Photo: cwillbounds/Flickr/Creative Commons License

The nation's most stringent climate protection law took another step forward today, as California held its first auction for greenhouse gas emissions allowances under the California Global Warming Solutions Act, better known as AB 32 (for Assembly Bill 32). The new auctions establish the world's second largest carbon market, in which large-scale polluters bid on permits to emit carbon dioxide and other greenhouse gases. The number of emissions permits will be reduced each year until 2020, and companies that cut their emissions will be able to sell their extra allowances to other companies.

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AB 32, passed in 2006 and enthusiastically endorsed by voters in 2010, requires that the state's carbon emissions be reduced to 1990 levels by 2020. The carbon permit auctions started today the major focus of the law, which also requires state agencies to cut their greenhouse gas emissions, and implements statewide greenhouse gas emissions reporting. The auctions are administered by the California Air Resources Board (CARB).

Today's auction, which ended at 1:00 p.m., made 23,126,110 greenhouse gas allowances available for 2013 and 39,450,000 advance allowances for 2015. Each allowance covers emissions of a ton of carbon dioxide or its equivalent in other greenhouse gases -- about what you'd produce driving a Nissan Pathfinder from Santa Monica to Kansas City. The ARB has set a minimum price for each allowance of $10, and bids must be made in multiples of 1,000 allowances. Funds raised by the auction will go to promote energy efficiency and renewable energy programs in the state.

The auction isn't without its opponents. The California Chamber of Commerce has sued to invalidate the law as an "illegal tax," though at least one legal observer characterizes the suit as "quite weak." A previous business-sponsored attempt to roll back AB 32, the 2010 ballot measure Proposition 23, was defeated rather crushingly at the polls.

It may be that voters remember the quality of life Californians enjoyed while emitting carbon at 1990 levels -- 25% less than today's -- and don't think a return to those standards will be all that bad.

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About the Author

Chris Clarke is a natural history writer and environmental journalist currently at work on a book about the Joshua tree. He lives in Joshua Tree.
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