The state of California is a leader in the United States for green initiatives. The state is well known for their plastic bag bans, plastic water bottle bans and a plethora of other initiatives to reduce impacts on the planet. California is also a leader in tackling climate change, with much focus on reducing emissions and tapping into renewable energies.
In 2006 California created a global warming law which would require the state to significantly reduce greenhouse gas emissions. The law requires California to reduce emissions to 1990 levels by the year 2020. In line with this law California recently began actions on their cap and trade program.
Wednesday of this week the state of California Air Resources Board began an auction for greenhouse gas emission permits. Currently the program only covers 350 industrial businesses, amounting to about 600 facilities in the state. California is selling pollution credits for $10 per metric ton of greenhouse gas emissions. Temporarily ninety percent of pollution credits are being considered free below allowable levels. Companies emitting more than the allowable levels will be required to buy more pollution credits.
Companies being affected include refineries, cement plants, steel mills and even many food processing plants. The goal of the cap and trade program is to reduce emissions as having to pay for pollution will push many companies to look for emission reductions. Overall, the cap and trade program of California is expected to become the world’s second largest such program.
The California Chamber of Commerce sued regarding the cap and trade program in order to stop the auction. However, the auction did go on and it is unknown whether the lawsuit by the Chamber of Commerce will impact further cap and trade on goings.