California approves cap-and-trade plan
California approved rules for its carbon trading scheme this week, laying the groundwork for what will be the world’s second largest carbon market. The California Air Resources Board (Carb), the state agency that has worked for two years designing the program, voted 9-1 in favor of the plan at a board meeting in Sacramento on Thursday evening (December 16, 2010).
The plan calls for the state to cut its emissions to 1990 levels by 2020 through a cap-and-trade system and other clean energy measures. About 2,675 million allowances will be distributed over the life of the program, according to Carb.
California Governor Arnold Schwarzenegger, who addressed the board in person on Thursday, voiced his support after the vote. “I applaud the air resources board for developing a flexible, phased-in system for producing emissions reductions and for its commitment to working with stakeholders to ensure the fi nal program is cost-effective, job-friendly and achievable,” he said. But Jon Costantino, a senior advisor with law fi rm Manatt, Phelps & Phillips in Sacramento and a former manager at Carb said there was “still a lot to do.” He said the board punted on decisions about how to divvy up allowances to utilities, what to do with revenue, and how to protect against market manipulation, among other issues.
But those expected to be active in the market were delighted with the outcome of the vote.
Source: Carbon Market North America