Today, the California Air Resources Board(CARB) met to consider final adoption of a proposed cap and trade program that is part of the state’s implementation of AB 32. CARB approved the cap and trade program by a unanimous vote. At a public hearing in August, CARB reviewed and heard testimony on the Functional Equivalent Document(FED). CARB has now posted its response to the comments of the FED on its website, and reviewed them during today’s hearing. The cap and trade plan will cover 85% percent of California’s emissions. Beginning in 2013 the plan places emission allowances on California’s power plants, refineries, cement plants and other high polluting facilities in the state. Other facilities won’t be part of the program until 2015.
The cap and trade program will require polluters to buy allowances from the state. The allowances represent a specific amount of greenhouse gases per year. The allowances can be bought or sold in the marketplace. If a company has extra allowances, because they were able to reduce emissions, they are able to sell their allowances to companies that failed to cut emissions or in fact increased their emission levels. In order to allow companies to gradually get used to the program, 90 percent of the allowances will be free in the first years of the program. Companies may also purchase carbon offsets, which are investments projects that reduce greenhouse gases. Companies can use these offsets to account for 8% of their emissions reductions.