Calif. Is First To Cap and Trade Emissions

California is First in Environmental Regulations

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    NEWSLETTERS

    TK
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    California will become the first state in the nation to attempt to reduce greenhouse gas emissions using cap and trade, adopting a practice that observers say could become a national model, observers say.

    Despite protests from business leaders and others who say that the tough emissions standards would lead industries like factories, oil refineries and others to relocate to other, less-strict states, the Air Resources Board voted Thursday to adopt the rules, which come into effect on Jan. 1, according to reports. Enforcement begins in 2013.

    The cap and trade scheme is part of the overall pollution controls mandated by AB32, the state's greenhouse gas-reduction bill approved by state legislators in 2006. The bill says that the state must return to 1990 emissions levels by 2020, and cap and trade constitutes 20 percent of that goal.

    "California’s vote proves that climate action is still possible in the United States on a big scale, even though Washington is gridlocked," Fred Krupp, president of the Washington-based Environmental Defense Fund, said in an interview with The Bay Citizen. "It puts another engine into place that’s going to drive carbon emissions down."

    Business leaders, however, called cap and trade an unfair tax. Under the plan, businesses receive credits from the state, allowing them to release gases. Businesses must purchase credits from other businesses with extra credits in order to emit more greenhouse gases than the limit allows. But every year, that limit is reduced, or capped, meaning that a business will be forced to reduce emissions or pay increasing penalties every year.

    The limit on emissions will be reduced every year until 2020, when 273 million metric tons will be removed from the atmosphere, according to the Chronicle.

    Certain heavily-polluting businesses, like glass plants, will have to pay for 10 percent of their credits in initial stages of the law, whereas other businesses will receive their credits free.