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California continues effort to curb greenhouse gas emissions. 

Release 09-105
FOR IMMEDIATE RELEASE
November 24, 2009
	  	  	
Stanley Young
916-322-1309
cell 916-956-9409
www.arb.ca.gov

California releases preliminary rules for cap-and trade-program

Draft regulation designed to seek input on range of issues

SACRAMENTO-The California Air Resources Board released a
preliminary draft version of California's greenhouse gas
cap-and-trade regulation today.

Release of the Preliminary Draft Regulation marks the beginning
of the next phase of the cap-and-trade rulemaking, culminating in
ARB's consideration in 2010 of the first broad based
cap-and-trade program in the nation. The rule will be in effect
by January 1, 2012.

"As world leaders prepare for another conference at which no new
international treaty will be signed, it is important that the
public understand that progress in reducing emissions continues,"
said ARB Chairman Mary D. Nichols. "By releasing the first draft
of a cap-and-trade system that California will put into effect in
2012, we are demonstrating the state's determination to push
ahead, continue to work with other states in the U.S. and abroad,
and invite others to join us."

The document
(http://www.arb.ca.gov/cc/capandtrade/meetings/121409/pdr.pdf) 
released today combines in one place the results of a year-long
public process involving 21 workshops on issues related to
cap-and-trade program design, and builds on more than two years
of collaboration with the partners of the Western Climate
Initiative. As a preliminary draft version it contains both draft
regulatory language on process and structure along with narrative
sections that address significant issues that remain to be
resolved within a cap-and-trade program.

"We believe that seeing the outstanding issues within the
broader context of the rules for the overall program will help
stakeholders and the public comment on all aspects of the
program," said Kevin Kennedy, who oversees the Office of Climate
Change at ARB.

The cap-and-trade program is one of the major building blocks of
California's far reaching plan to address the state's
contribution to climate change. The preliminary draft covers the
full range of elements for the cap-and-trade program outlined in
the Scoping Plan, adopted in December 2008. These include:

    * Requiring sources of GHG emissions to manage their
emissions under an aggregate declining emissions cap that
supports achieving the 2020 emissions target mandated by AB 32.
    * Starting the program in 2012 with about 600 of the state's
largest GHG-emitting stationary sources (primarily industrial
sources and electricity generators), along with electricity
imports.
    * Including emissions from transportation fuel combustion
(e.g., gasoline, diesel, ethanol), and from fuel combustion at
stationary sources that fall below the threshold for direct
inclusion in the program (e.g., residential and commercial
natural gas combustion) by covering the suppliers of fuel to
these sources.
    * Requiring a minimum number of allowances to be auctioned
at program start.
    * Allowing limited use of high quality offsets outside of
capped sectors to cover a portion of the overall emissions
reductions.
    * Establishing clear rules for emissions trading, monitoring
and enforcement. 


Once adopted, a California cap-and-trade program that links with
similarly rigorous programs implemented by partners of the
Western Climate Initiative will include a stringent declining
emissions cap along with trading and the limited use of offsets
to provide flexibility for covered entities to comply.

When fully implemented, the program would cover 85 percent of
California's greenhouse gas emissions, including emissions from
electricity generation, large industrial sources, transportation
fuels, and residential and commercial use of natural gas.

The program development is being supported through the advice
and review of a blue ribbon committee of outside experts (the
Economic and Allocation Advisory Committee)
http://www.climatechange.ca.gov/eaac/.

The Preliminary Draft Regulation is available at
http://www.arb.ca.gov/cc/capandtrade/capandtrade.htm .

The Air Resources Board is a department of the California
Environmental Protection Agency. ARB's mission is to promote and
protect public health, welfare, and ecological resources through
effective reduction of air pollutants while recognizing and
considering effects on the economy. The ARB oversees all air
pollution control efforts in California to attain and maintain
health based air quality standards.

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