California Cap and Trade: Landmark Program Approved

“Cap-and-trade is another important building block in California’s effort to create a clean and vibrant economy,” said ARB Chairman Mary D. Nichols.  “It sends the right policy signal to the market, and guarantees that California will continue to attract the lion’s share of investment in clean technology.  When the nation addresses the growing danger of climate change, as I believe it must and will, California’s climate plan will serve as the model for a national program.” (California Air Resources Board press release

On October 20, 2011, the California Air Resources Board adopted in a unanimous vote the country’s first state-administered cap and trade regulations. For analysis of the impact of this landmark set of air pollution controls on companies doing business in California, we turn to lawyers and law firms on JD Supra (we will update this list as additional commentary comes in):

California Air Resources Board Finalizes Cap and Trade Regulation (Manatt, Phelps & Phillips, LLP):

“It is hard to understate the importance of this vote. Once this regulation becomes effective in January 2012, it will change the economics of California’s energy and transportation sectors, probably forever. Depending on which side of the debate you’re on, this is either a breakthrough, or a breakdown, of public policy.” Read more» 

California Air Resources Board Adopts Cap-and-Trade Program Regulations for Greenhouse Gases (Davis Wright Tremaine LLP):

“The California Global Warming Solutions Act of 2006 (AB 32) requires California to reduce overall emissions to 1990 levels by 2020. The cap-and-trade program is targeted to capture 18% of the reductions needed to meet the goals of AB 32. [The California Air Resources Board] is promoting this cap-and-trade program as one part of its overall program to reduce [greenhouse gas] emissions. Under AB 32, CARB has previously implemented through regulation several other major measures including standards for low carbon fuels and ultra-clean cars.” Read more» 

California Passes Cap and Trade. Now What? (Lane Powell PC – Environmental Law):

“Beginning January 1, 2012, 350 California businesses representing approximately 600 facilities, will be covered by the program. Electric utilities and large industrial facilities will come into the program the following year and distributors of transportation, natural gas and other fuels will start in 2015. The cap for 2013 is set at two percent below the forecast for 2012 emissions and will decline two percent in 2014 and three percent each year after until 2020.” Read more» 

California Air Resources Board Approves Final Cap-and-Trade Regulations (Reed Smith):

“An entity that has emissions from combustion of biomass-derived fuels is required to report and verify its emissions under the mandatory reporting regulation, but emissions from certain source categories (including the geothermal generating units and facilities) and certain biomass fuels (including biodiesel, fuel ethanol and agricultural crops or waste) will not be subject to the compliance obligation.” Read more» 

California Adopts Historic Cap-and-Trade Program for Greenhouse Gas Emissions (Morrison & Foerster LLP):

“Covered businesses should now develop strategies for obtaining allowances and/or offsets, and/or reducing their emissions. Even businesses and private individuals that are not subject to the new regulations may be indirectly affected by increases in the cost of fossil-fuel energy as companies pass the cost of compliance to consumers, and those businesses should prepare for these impacts. Despite a general cooling of concern over climate change that seems to be resulting from the current economic challenges our country faces, California continues to charge ahead with implementation of AB 32, and companies that do business in California must plan accordingly.” Read more» 

ARB Passes Final Regulations for Cap-And-Trade Program (Sheppard Mullin Richter & Hampton LLP):

“… California is currently working closely with six other western states and four Canadian providences through the Western Climate Initiative to design a regional program that can deliver GHG emission reductions within the region at a lower cost than could be realized through a California-only initiative alone.” Read more»

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