California regulators last week claimed a landmark achievement in the implementation of the state's ambitious but controversial AB32 climate legislation with the release of the results from its first carbon auction.
The California Air Resources Board has been developing regulations for the world's second largest cap and trade program to help the state reduce CO2 emissions to 1990 levels by 2020. In the first phase, electric utilities, refiners and heavy industries emitting more than 25,000 tons of CO2 per year will be capped. From 2015, suppliers of liquid fuels and natural gas will be included in the cap of 394.5 million tons of CO2.
CARB's cap-and-trade program has so far withstood repeated challenges by the oil industry, environmentalists and intervention from the Federal Energy Regulatory Commission over concerns about electricity imports.
Mary Nichols, CARB chairwoman, insisted that she was "delighted" with the results of the auction. "The goal was to have a competitive bidding process and get the allowances to the people who needed them, and we were extremely successful in doing that."
