Recently, the California Air Resources Board or ARB adopted its long-anticipated regulations for controlling greenhouse gas emissions (GHGs) through a market-based cap and trade system. California’s regulations represent a significant development in the regulation GHGs. California could well set the model for similar controls in other states and will certainly stoke the nationwide debate over GHG regulations.
The ARB will set caps based on 2012 emissions for the state’s largest GHG emitters, including power plants, refineries, and other large industrial facilities. The cap will decline each year. Other sources will be phased in over time. The cap to be set, and the distribution of allowances, will be subject to considerable debate. The allowances will be distributed without cost early in the process, but will transition to an auction based system administered by the ARB.
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