A recent poll of registered voters in California concerning the new State “Cap and Trade” auction program, initiated Wednesday, November 14, 2012, and aimed at reducing greenhouse gas (“GHG”) emissions found strong public support for the program. As set forth in more detail in the Aviation & Airport Development Law News blog of November 13, 2012, the Cap and Trade program assigns “caps” to carbon emissions (euphemistically called “allowances”) for various industries, including utilities and refineries. It then allows those companies who have not used the full allotment of allowances to sell their unused allowances to companies that have expended their own allowances. Effectively, the program would create industry-wide caps on emissions, with flexibility within industry groups as to the way in which to utilize the allowances within the constraint of the caps. The political significance of the Cap and Trade program as one of the first of its kind in the nation goes well beyond the simplicity of its procedure.
Once again taking a forefront position in innovative environmental programs, California, for good or ill, is poised to launch the first of its kind and scope in the nation greenhouse gas (“GHG”) emissions trading system (“Cap and Trade”).
On November 14, 2012, the California Air Resources Board (“CARB”) will hold an auction mandated by California’s 2006 “Climate Change” law, AB32, in which pollution permits (“Allowances”) will be bartered to more than 350 businesses, including utilities and refineries. The concept behind Cap and Trade is that polluters must either cut carbon emissions to the level of a specific emission cap placed on individual types of pollutants by AB32, or buy allowances for each metric ton of carbon discharged over cap limits from other companies whose emissions did not reach cap levels. Through the Cap and Trade program, excess carbon polluters can achieve up to 8% of emissions reductions needed.