Full Speed Ahead – California Overwhelmingly Approves Landmark Greenhouse Gas Cap-and-Trade Program


As predicted, the California Air Resources Board (CARB) voted 9-1 on December 16 to adopt the nation’s largest cap-and-trade program to regulate greenhouse gas (GHG) emissions. The details of the regulations can be found in our prior update by clicking here. Given Congress’s inaction to advance national climate change legislation, the program will set the price for carbon in California (the seventh largest economy in the world), with invitations for linkage to other state and regional carbon credit markets.

At its public hearing, CARB voted to adopt its draft regulations and directed its staff to make various modifications and obtain input through a 15-day public comment process before finalizing and submitting the regulations to the California Office of Administrative Law. Suggested modifications to the cap-and-trade program include: (1) clarifying language in the final resolution with respect to emissions without a compliance obligation; (2) finalizing the allocation methodology for individual utilities; (3) incorporating efficiency benchmarks for each industry; (4) setting aside a certain percentage of allowances each year to incentivize the in-state production of voluntary renewable energy; and (5) ensuring consistency between compliance offset protocols and regulatory requirements for offsets.

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Published In: Administrative Agency Updates, Energy & Utilities Updates, Environmental Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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