California public supports carbon market
In 2006 California passed Assembly Bill 32 (AB32), more commonly referred to as the state’s climate law that aims to reduce state emissions to 1990 levels by 2020.
In order to reach this ambitious target a number of programs have been implemented, including stricter gas mileage standards and renewable energy requirements.
However, no piece of AB32 has gained public attention as much as the California carbon market. Set to launch in January, 2013, it will become North America’s largest cap-and-trade carbon market.
The cap-and-trade mechanism is designed to regulate heavy emitters that pour millions of tons of carbon dioxide (CO2) and other harmful gasses into the air every year. Typically these sources include power plants and fuel refineries. These businesses will have the option to either improve the efficiency of their operations, or purchase California carbon allowances (CCAs) and offsets to meet their reduction targets.
Opposition has largely come from energy conglomerates questioning the necessity of regulating carbon, despite an Environmental Protection Agency finding that high levels of CO2 results in negative respiratory effects including asthma. These companies argue that the cost of meeting the new standards will have to be passed on to customers. The exact amount of this cost increase varies depending on who is conducting the research. Supporters of the market claim a minimal jump of as little as 3%. Those opposed to the market project up to 20% hikes.
In 2010, out-of-state oil companies poured millions of dollars into support for Proposition 23, which would have halted progress towards a successful market launch.
However, California citizens went to the polls in record numbers to shoot Prop 23 down, voicing their support for a green economy.
Recognizing the inevitable shift from fossil fuels to renewable energy, California is providing an incentive for businesses to improve the efficiency of their operations. If they retrofit certain facilities, they can even sell their extra carbon allowances, creating extra profit on top of their reduced energy costs.
Despite some opposition, the California Air Resources Board (ARB) has continued implementing its carbon market. ARB has contracted out the design of its market platform in anticipation of its first allowance auction in November. They also recently released applications for carbon registries and verifiers planning to provide assistance monitoring carbon offsets.
In a recent poll conducted by EMC Research, over half of state residents support the California carbon market. Although the study was funded by opponents of the market, the results still showed that the majority of the population approves the steps that California is taking toward a green economy.