California Unveils Plans for Regional Carbon-Trading Market
Source: San Francisco Chronicle, 7/24/08
California joined six other western states and four Canadian provinces in unveiling draft plans for the largest regional carbon-trading system in the world, an integral part of the state’s drive to reduce greenhouse gas emissions by 30 percent by 2020.
As key component of the Western Climate Initiative, the system would regulate a host of high-emitting industries, including electric utilities, oil refineries as well as large commercial and industrial facilities. Modeled after a similar system in Europe, it would set a ceiling on all carbon emissions, allowing high polluters to buy “carbon credits” from those who emit less than the limit. While the details are still being formed, the group plans to launch the system in 2012 with an initial goal of reducing carbon emissions by 15 percent of 2005 levels by 2020.
"We very much believe this supports California's own plan to grow the economy and protect the environment," said Linda Adams, secretary of the California Environmental Protection Agency.
The establishment and scope of the regional system was applauded by all, yet both environmental groups and industry remained skeptical until more details are ironed out. Environmentalists fear a repeat of the European system, where the cap was not aggressive enough to significantly reduce emissions and too many offsets were offered to polluters. Industry representatives are waiting to see how carbon credits will be rationed and its impact on the cost to consumers.
Nonetheless, California air regulators believe that this system could account for 20 percent of the reductions called for in AB 32, the state’s landmark greenhouse gas law. And while much has yet to be decided before the plan is finalized in December, this remains a first key step to tackling emissions from some of the state’s single largest polluters.
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