California regulators have approved an ambitious carbon-trading program in a move that some businesses fear will increase their costs, but also could be a potential revenue boon to the financially struggling state.
The 9-1 vote by the California Air Resources Board - at a packed meeting that featured climate skeptics with signs reading, "Global Warming: Science by Homer Simpson," according to Huffington Post - creates a complicated market for carbon credits effective in 2012. It allows big emitters, such as power plants, refiners and other industries, to buy carbon credits as a way to comply with mandatory emission cuts.
As the Wall Street Journal notes, the regulations come on the heels of the Cancun climate talks and six weeks after voters in California kept AB 32, the state's landmark climate law - of which cap and trade was a portion. Attempts to create a national cap and trade program have not been successful.
Supporters hope the California program will be a model for other states to follow.
There also is talk of linking it to cap and trade programs in New Mexico and Canada.
Air Resources Board Chair Mary Nichols said the state will create mechanisms to prevent manipulation of the carbon market, and wants a fund that uses carbon auction funds for energy-savings programs for low-income families.
The state plans to give away most of the carbon allowances in the first few years, but, by some estimates, $7 billion of revenue could eventually be created through a market. Here is a Los Angeles Times story that gives a good analysis of the program.
Meanwhile, manufacturers weren't necessarily keen on the whole thing, this San Diego Union-Tribune story notes. Here's a quote: "It will hurt manufacturers hard — raising costs on all types of energy,” warned Dorothy Rothrock, their lead negotiator on the issue for a business organization. “Manufacturers can’t pass along the costs of cap and trade when prices are set in global markets.”
There also is some speculation that the program could lead to rate increases.
The 9-1 vote by the California Air Resources Board - at a packed meeting that featured climate skeptics with signs reading, "Global Warming: Science by Homer Simpson," according to Huffington Post - creates a complicated market for carbon credits effective in 2012. It allows big emitters, such as power plants, refiners and other industries, to buy carbon credits as a way to comply with mandatory emission cuts.
As the Wall Street Journal notes, the regulations come on the heels of the Cancun climate talks and six weeks after voters in California kept AB 32, the state's landmark climate law - of which cap and trade was a portion. Attempts to create a national cap and trade program have not been successful.
Supporters hope the California program will be a model for other states to follow.
There also is talk of linking it to cap and trade programs in New Mexico and Canada.
Air Resources Board Chair Mary Nichols said the state will create mechanisms to prevent manipulation of the carbon market, and wants a fund that uses carbon auction funds for energy-savings programs for low-income families.
The state plans to give away most of the carbon allowances in the first few years, but, by some estimates, $7 billion of revenue could eventually be created through a market. Here is a Los Angeles Times story that gives a good analysis of the program.
Meanwhile, manufacturers weren't necessarily keen on the whole thing, this San Diego Union-Tribune story notes. Here's a quote: "It will hurt manufacturers hard — raising costs on all types of energy,” warned Dorothy Rothrock, their lead negotiator on the issue for a business organization. “Manufacturers can’t pass along the costs of cap and trade when prices are set in global markets.”
There also is some speculation that the program could lead to rate increases.
Good or bad, the new regulation is an indication that California is serious about climate change.
"Billions of dollars are being poured into California in clean technology venture capital investment," Gov. Arnold Schwarzenegger said in the Wall Street Journal story. "Of course, we have to be sensitive because it's an economic downturn, and this Air Resources Board knows they have to be sensitive. But we have to reach our goals by 2020."
Photo by heatingoil.com
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