Federal cap and trade program and AB 32 implementation

By CMTA Staff

Capitol Update, May 8, 2009 Share this on FacebookTweet thisEmail this to a friend

While Congress, the White House and Senate committees are working on Capitol Hill to develop climate legislation that would work for the United States, the California Air Resources Board is implementing regulations outlined in the scoping plan for AB 32, California’s own climate law. The scoping plan includes many measures being considered by federal lawmakers, including a cap and trade program.  The measures in the scoping plan will ensure California meets the target for AB 32 – emissions at 1990 levels by 2020.  

A cap and trade program would set a ceiling and put a price on greenhouse gas emissions. Companies could either purchase or receive their allowance for free, and then buy or sell portions of their allotment to meet emissions limits. Obama's budget expects to raise $650 billion by auctioning off all the allowances to emitting companies, with the bulk of the money going back to families to help with higher energy prices. Representatives from coal and industrial states are pushing to distribute at least some of those permits for free to ease costs.

What happens to the state climate program under AB 32 after a federal policy is finally adopted? Will the federal targets be more aggressive, on a different timeline, or otherwise inconsistent with AB 32?  Will federal legislation specifically pre-empt state law, and if so, how broad will the pre-emption be?  If not, will industry in California be subject to duplicative, overlapping, or more stringent requirements?  The most important question we need to ask is – What are the policies California should adopt that would best support US reduction goals, improve our economy, and advance technology to help the rest of the world achieve global goals?  

CMTA believes we should take a fresh look at our climate policies to ensure California is on the right track in light of federal action. Perhaps the timeline for regulations should be adjusted to match developing policies at the federal level to make sure we don’t get out ahead.  AB 32 was enacted when no federal policy was on the horizon. We shouldn’t put on blinders and forge ahead without fully understanding all the implications for California.  

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