California Air Resources Board Adopts Cap-and-Trade Program Regulations for Greenhouse Gases


On Oct. 20, the California Air Resources Board (CARB) adopted the final regulations to implement a cap-and-trade program for greenhouse gas (GHG) emissions. Upon approval by the Office of Administrative Law, the regulations will take effect on Jan. 1, 2012. The obligation to surrender allowances under the program, however, will not begin to accrue until Jan. 1, 2013. This first phase of the cap-and-trade program includes California electric generation facilities, electric utilities, large industrial facilities which emit 25,000 tons or more of GHGs, and those who import power from out of state into California.

The California Global Warming Solutions Act of 2006 (AB 32) requires California to reduce overall emissions to 1990 levels by 2020. The cap-and-trade program is targeted to capture 18% of the reductions needed to meet the goals of AB 32. CARB is promoting this cap-and-trade program as one part of its overall program to reduce GHG emissions. Under AB 32, CARB has previously implemented through regulation several other major measures including standards for low carbon fuels and ultra-clean cars.

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