It’s for real!
Or — to be more cautious — it might soon be for real!
On Thursday December 16th, 2010, California’s Air Resources Board began a cap and trade system for carbon. This system will implement the state’s law mandating that carbon emissions be reduced back to 1990 levels by 2020.
This will amount to a 15% decrease from current emissions.
The system will let greenhouse gas emitters buy and sell emission allowances. It covers everyone who emits more than 5,000 tons of carbon dioxide per year. That’s about 360 businesses, who taken together emit about 85% of the CO2.
At first these business will receive free allowances that cover most of their emissions, but as time passes, they’ll have to buy those allowances through quarterly auctions. According to the plan, there will be two phases. By 2012, all major industrial sources and utilities will be covered. By 2015, distributors of fuels and natural gas will also be included.
This program is the capstone of our climate policy, and will accelerate California’s progress toward a clean energy economy. It rewards efficiency and provides companies with the greatest flexibility to find innovative solutions that drive green jobs, clean our environment, increase our energy security and ensure that California stands ready to compete in the booming global market for clean and renewable energy.
The governor also showed up at this historic board meeting, and gave a speech.
But I can guess what you’re wondering, or at least one of the many things you should be wondering.
“How much can California do by itself?”
Luckily, California is not doing this by itself. By the time the program gets rolling in 2012, California plans to have built a framework for carbon trading with New Mexico, British Columbia, Ontario and Quebec — some of its partners in the Western Climate Initiative.
The green guys are the ‘partners’; the other guys, blue because they’re watching carefully but sadly not taking part, are the ‘observers’.
Furthermore, ten states of the US — New York, New Jersey, Delaware, Maryland and the New England states — have started up another system, the Regional Greenhouse Gas Initiative, which covers only electric utilities. They are already doing auctions.
So, while in theory it might make sense to institute carbon trading on a national basis, political realities have pushed North America down a different path, where smaller regions take the lead in groupings that may transcend national boundaries! And that is very interesting in itself.