California approves first broad US climate plan

Yahoo News 17 Dec 10;

SAN FRANCISCO (AFP) – California has approved the most sweeping US plan to reduce greenhouse gas emissions, acting on its own against climate change as proposed nationwide plans flounder in Washington.

The largest US state, which would be the world's eighth largest economy if a country, will from 2012 start a "cap-and-trade" system under which industry will be required to cut emissions but can trade credits on a new market.

Outgoing Governor Arnold Schwarzenegger, who has differed sharply with much of his Republican Party on the environment, saw the decision by a state panel late Thursday as part of his legacy.

"I campaigned in 2003 about that -- I want to show California that we can protect both the economy and the environment," the actor-turned-politician told the California Air Resources Board which voted 9-1 for the plan at a meeting in the state capital Sacramento.

"This is not just about global climate change," said Schwarzenegger, acknowledging that some people were skeptical about scientists' view that temperature are rising.

"Since 2006 or so green jobs have been created 10 times faster than in any other sector, so it's also an economic plus," he said.

The European Union now has the world's only wide-scale cap-and-trade plan, which plays a pivotal role in the bloc's commitments to reduce the emissions blamed for climate change.

Ten states on the US East Coast have also run a cap-and-trade system that started last year, but the initiative -- the Regional Greenhouse Gas Initiative -- is limited to the power sector.

The US House of Representatives in 2009 approved plans for the first nationwide cap-and-trade system, with President Barack Obama's Democratic Party arguing that it would spur a new green economy and fight climate change.

The proposal died in the Senate, with Republicans leading charges that it would hurt an already weak economy. Prospects for approval have all but vanished after the Republicans swept congressional elections last month.

But voters in Democratic-leaning California soundly defeated a referendum, supported by oil interests, that would have frozen the state's actions on climate change.

Louis Blumberg, director of climate change for The Nature Conservancy environmental group's California branch, said that the state offered "a model" for others.

"At a time of critical need for decisive action to address climate change, California's tremendous leadership is creating renewed momentum at the federal and international levels," Blumberg said.

Initially, California will technically not restrict emissions but instead freely allocate "allowances" to businesses covering their carbon output. The state will gradually reduce allowances, forcing firms to go green.

Companies can also earn credit by supporting environmental projects in forests or farms, including through preservation of woods in Mexico's Chiapas state and Brazil's Acre state.

The provision has divided environmental activists, some of whom voiced anger that companies could reduce their own requirements to curb pollution by supporting timber firms that cut down forests but then plant new trees.

"We cannot and should not try to clear-cut our way out of climate change," said an action appeal from the Sierra Club California.

California aims to reduce carbon emissions by 25 percent, bringing them even with 1990 levels by 2020. The goal is less ambitious than that of the European Union, which has committed to reductions of 20 percent from 1990 levels by 2020.

California approves extensive carbon-trading scheme
BBC News 17 Dec 10;

California has approved an extensive carbon-trading plan aimed at cutting greenhouse emissions.

State regulators passed a "cap-and-trade" framework to let companies buy and sell permits, giving them an incentive to emit fewer gases.

The aim is to create the second-largest market in the field, after Europe's.

State officials hope the scheme will be copied across the US, but opponents warn it may harm California's growth and lead to higher electricity prices.

California's Air Resources Board approved the new rules late on Thursday. They are part of a landmark state climate bill passed by the legislature in 2006, which set 1 January 2011 as the deadline for enacting a cap-and-trade system.

The scheme means that from 2012 California will allocate licences to pollute and create a market where they can be traded.

A company that emits fewer greenhouse gases than its permits allow, could sell the extra capacity to a dirtier firm.

By making over-polluting more expensive, the scheme aims to provide incentives to develop greener technology.

Over time the total amount of greenhouse gas emissions - the cap - is to be reduced. California wants to cut emissions to 1990 levels by 2020.
Costs

Although all firms will eventually need to buy greenhouse gas allowances, most of the permits will be given away in the first three-year period.

But many businesses fear they will suffer in an economy that is struggling to emerge from recession, the BBC's Rajesh Mirchandani in Los Angeles says.

Dorothy Rothrock of the California Manufacturers and Technology Association told Reuters news agency: "There are definitely going to be some costs incurred right up front for these companies."

Outgoing Governor Arnold Schwarzenegger - who supports environmental causes - argues that growth in emerging green technologies will offset the costs of cap-and-trade.

"Since 2006 or so green jobs have been created 10 times faster than in any other sector," he said.

California - the world's eighth largest economy - already has strict climate-related regulations, including renewable energy mandates for utilities, and tough fuel-efficiency standards for cars.