California Cap-and-Trade May Start a Year Behind Schedule

California's cap-and-trade carbon market could be delayed for up to a year after it was originally planned to go into place, Reuters reports.

Experts at Carbon Expo 2011 in Barcelona agree that a court ruling forcing California to analyze other ways to cut greenhouse gas emissions will delay the implementation of its cap-and-trade program, Reuters found.

(The cap-and-trade program) is scheduled to begin operating on January 1, 2012, but a California judge's ruling last month put the move on hold until the agency designing the market completes an analysis of alternative measures to cut greenhouse gases other than carbon trading.

Brian Storms, chief executive of environmental exchange NYSE Blue, estimated the ruling will cause a delay of two to 12 months, and others agree the start date will be difficult to meet.

The California Air Resources Board, which is overseeing the program, was instructed by a judge to fully analyze alternatives to cap-and-trade before it can move forward with the program.

The carbon market is part of the state's attempt to reduce its GHG emissions to 1990 levels by 2020, a limit set by the 2006 Global Warming Solutions Act (AB 32).

While experts seemed to be on the same page that the ruling will hold back cap and trade, it won't stop it entirely.

"It is possible that it will be delayed and there will be small changes, but I would argue against anyone who says this is a legitimate threat," said Nathan Richardson, a resident scholar at Resources for the Future.

In other news out of Carbon Expo:

  • Denmark, Italy, the Netherlands and other countries were labeled by an RWE Npower executive as "no go" areas for carbon capture and storage plants due to unclear laws and challenges from environmental groups.
  • The World Bank will grant $350,000 each to Chile, China, Columbia, Costa Rica, Indonesia, Mexico, Thailand and Turkey to help them create GHG trading programs.
  • When the European Union expands its cap-and-trade program to include flights at EU airports next year, it will retain the option to not count incoming flights from countries outside of the EU. That exemption, if approved, would only apply if countries have their own measures set up to reduce aviation GHG emissions.

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