California approves carbon market rules

SACRAMENTO Fri Oct 21, 2011 8:20am EDT

A parking structure at the University of California San Diego uses innovative ''solar trees'' to collect renewable energy from the Sun February 8, 2011. REUTERS/Mike Blake

A parking structure at the University of California San Diego uses innovative ''solar trees'' to collect renewable energy from the Sun February 8, 2011.

Credit: Reuters/Mike Blake

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SACRAMENTO (Reuters) - California regulators on Thursday approved final regulations for a carbon market that is one of the biggest U.S. responses to climate change.

The state believes the market for greenhouse gases, which starts in 2013, will let it address global warming in a low-cost way and become the center of alternative energy industries, like solar, although some businesses fear higher energy prices.

The most populous U.S. state is moving ahead with the plan years after federal regulators rejected a similar idea for the nation, partly on concerns of the effect on businesses.

The California Air Resources Board voted 8-0 to adopt the market regulations, which officials said are critical to the state's goal of cutting carbon emissions to 1990 levels by 2020 -- about a 22 percent reduction from forecasted business-as-usual output.

Power companies and factories will be able to trade a gradually decreasing number of permits to emit carbon dioxide and other greenhouse gases under the so-called cap-and-trade plan, which counts on market forces leading companies to find the cheapest way to cut emissions.

About 350 companies representing 600 California factories and oil refineries must begin complying with the program in 2013.

By 2015, when transportation fuels are brought under the cap, the system will cover 85 percent of the California economy, the eighth largest in the world.


There is still a possibility, though, that citizens groups, who fear the plan will intensify pollution in poor communities, or trade groups could file suit, Peter Hsiao, a lawyer at Morrison & Foerster said by email.

Brenda Coleman, an official with the California Chamber of Commerce, told the climate regulators on Thursday that elements of the plan amounted to an illegal tax on the refining industry.

Tupper Hull, a spokesman for the Western States Petroleum Association, declined to comment on whether the trade association would file a suit.

A spokesman for the Air Resources Board said that he was confident any legal challenges would be able to be resolved swiftly.

(Reporting by Rory Carroll of Point Carbon, editing by Peter Henderson, Gary Hill and Carol Bishopric at Reuters.

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Comments (7)
musicmind2004 wrote:
Having grown up with asthma, this is music to my lungs!
Sure, there will be some major downsides, but this could be exactly what we need to force these industries to advance, instead of living in the 1900′s. If we spent a fraction of what the oil industry made in the last 10 years on advancing renewable energy technology, this wouldn’t even be necessary.

Oct 20, 2011 10:52pm EDT  --  Report as abuse
musicmind2004, you do realize that “greenhouse gasses” don’t have anything to do with your breathing don’t you?

Oct 21, 2011 10:09am EDT  --  Report as abuse
aligatorhardt wrote:
The costs of pollution are already being paid by everyone except those who produce the pollution. It is more than fair that the responsible parties pay for their damages. Thanks to California for leading the way to a cleaner environment. Clean energy systems face unfair competition from dirty energy that pushes it’s cost onto taxpayers, even those that have no power to make changes. While clean energy , due to the hiding of costs of pollution appears more expensive to install, the savings from systems that run without fuel costs provide for a way to decrease costs of energy in the long term. It makes no sense to allow short term gains for a few special interests to induce long term expenses on everyone else. Time will show the value in this policy.

Oct 22, 2011 7:26am EDT  --  Report as abuse
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