Polluters Get 1-Year Respite from California Cap-and-Trade

Polluters Get 1-Year Respite from California Cap-and-Trade

Image CC licensed by Flickr user Aidan.Morgan

In the wake of a lawsuit filed by environmental groups, California will delay enforcement of its greenhouse gas cap-and-trade program by one year to give the state more time fine-tune the scheme.

The head of the California Air Resources Board (CARB) said Wednesday that polluters wouldn't have to comply with the emissions trading program until 2013, but it would still begin in 2012.

"We will be testing the system, doing simulation models, but no one will be held accountable during that year for compliance," CARB Chairwoman Mary Nichols told legislators Wednesday, ClimateWire reported. "But at the end of 2014, people will still be where they would have been if the program had started."

The delay doesn't let any polluters off the hook, just delays when they must begin participating in the cap-and-trade. The stringency of the program will remain the same in order to help the state meet the its goal of reducing 2020 greenhouse gas emissions to 1990 levels. The first three-year compliance period would be shortened to two years and quarterly auctions for the emissions allowances will begin in the second half of 2012, instead of February 2012.

"Some who were breathing into a paper bag, who were fast running out of options and looking for the exit, can now take the time to develop compliance options," Josh Margolis, CEO of emissions brokerage CantorCO2e, told ClimateWire, adding that the delay may keep more businesses in California.

The move comes less than a week after a California appeals court ruled the state may proceed with the program while the state appeals a lower court's decision that it must consider other alternatives to a cap-and-trade program to reduce emissions.

This was the result of a lawsuit filed by environmentalists who argued a cap-and-trade program allows polluters to buy their way out of making their own direct cuts to their emissions. An analysis of alternatives will be considered for adoption Aug. 24, the Los Angeles Times reported.

The cap-and-trade program is the centerpiece of the state's efforts to implement The Global Warming Solutions Act of 2006, also known as AB 32. When operational, it would be the nation's largest emissions trading program, exceeding the Northeast's utility-only program, the Regional Greenhouse Gas Initiative.

Both have faced huge hurdles in recent years as cap-and-trade programs have fallen out of favor with many lawmakers and members of the public. New Jersey recently yanked its participation in RGGI, while Arizona's governor withdrew from the Western Climate Initiative, a regional cap-and-trade program that would cover California and other Western states.

Image CC licensed by Flickr user Aidan.Morgan.