California Air Resources Board (CARB) - Update

We continue to watch, attend and at times comment on the development on CARB’s implementing of AB 32 – the Global Warming Solutions Act of 2006, which set the 2020 greenhouse gas emissions reduction goal into law. CARB is continuing to work towards regulations to reduce to meet AB 32 goals by 2020.

Recently, the ARB Board gave the green light to start moving forward with California’s emissions trading program, more commonly referred to as Cap-and-Trade. The regulation sets a statewide limit on the emissions from sources responsible for 80 percent of California’s greenhouse gas emissions and establishes a price signal needed to drive long-term investment in cleaner fuels and more efficient use of energy. The program is designed to provide covered entities the flexibility to seek out and implement the lowest-cost options to reduce emissions.

The cap-and-trade program also works in concert with other measures, such as standards for cleaner vehicles, low-carbon fuels, renewable electricity and energy efficiency, and complements and supports California’s existing efforts to reduce smog-forming and toxic air pollutants.

The regulation will cover 360 businesses representing 600 facilities and is divided into two broad phases: an initial phase beginning in 2012 that will include all major industrial sources along with utilities; and, a second phase that starts in 2015 and brings in distributors of transportation fuels, natural gas and other fuels.

Companies are not given a specific limit on their greenhouse gas emissions but must supply a sufficient number of allowances (each covering the equivalent of one ton of carbon dioxide) to cover their annual emissions. Each year, the total number of allowances issued in the state drops, requiring companies to find the most cost-effective and efficient approaches to reducing their emissions. By the end of the program in 2020 there will be a 15 percent reduction in greenhouse gas emissions compared to today, reaching the same level of emissions as the state experienced in 1990, as required under AB 32.

Assembly Bill 32 – Global Warming Solutions Act

Assembly Bill 32 as Chaptered into Law

Assembly Bill 32 – Global Warming Solutions Act