With Federal Climate Legislation Stalled, California Moves Forward on Cap and Trade


By Kris FitzPatrick

With final adjustments completed this week by the California Air Resources Board (CARB), the state’s cap and trade emissions plan will go into effect on January 1, 2012. CARB’s agreement finalizes a five-year process to determine the implementation details of AB 32, the emissions reduction law passed in 2006.

Back in 2006, California saw itself as out in front of likely federal climate legislation. As we know, of course, that federal policy stalled in 2009. California now finds itself not only out in front, but all alone. Not surprisingly, many business groups in the state are predicting dire consequences. As the San Francisco Chronicle reported on Friday, industry groups see the plan’s allowance purchasing requirement as a competitive disadvantage in competing with out of state companies. They say that jobs will soon move to those other, less-regulated states in droves.

Despite these warnings, most California residents remain committed to the emissions reduction plan. A December 2010 poll commissioned by Next 10, a group that studies economic, environmental, and quality of life issues in the state, reported that 73 percent of California voters agree that greenhouse gas reductions and economic growth can coexist. A month earlier, those voters rejected Proposition 23, which sought to suspend AB 32, by a margin of 62 percent to 38 percent.

Federal climate legislation may be dead at the moment, but eventually it will return to the national agenda. When that time comes, the success or failure of California’s cap and trade system will shape any national proposals. While no stranger to the environmental leadership role, California knows that a great deal is riding on this plan.


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