California’s ARB Releases Proposed Cap-and-Trade Rules as AB 32 Stands with Voters

Days after California’s Air Resources Board (ARB) released its proposed greenhouse gas cap-and-trade regulation, voters on Tuesday rejected a controversial proposition to suspend the state’s landmark greenhouse gas reduction law.

If it had passed, Proposition 23 would have suspended AB 32, or the “Global Warming Act of 2006,” until unemployment in the state dropped below 5.5% for 12 months. Supporters of the measure trumpeted it as a fair response to the economic slowdown.

AB 32 requires that greenhouse gas emission levels in the state be cut to 1990 levels by 2020. Reductions are to begin in 2012.

The proposed regulations released on Thursday by the ARB, an arm of the state’s Environmental Protection Agency, are a key part of AB 32’s scoping plan. Their release marks the beginning of a comment period that ends in a Dec. 16 public hearing in Sacramento, after which the ARB will consider adopting the program.

Among key aspects of the regulations are that the ARB plans to set a greenhouse gas emissions cap in 2012 based on an estimate of actual emissions for that year. The power sector, including entities exporting power to California, would be the first sources subject to the program.

Any electrical generator or other stationary source emitting more than 25,000 metric tons of CO2-equivalent gases will be allocated emissions allowances in 2012 based on its emissions reporting. The overall emissions cap is also expected to decline 2% to 3% each year, with fewer allowances to be issued on an annual basis, though the overall cap will expand in 2015 when the program begins to include providers of transportation fuels and residential and commercial fuels.

Sources: ARB, POWERnews