On November 19, 2012, the California Air Resources Board (“ARB”) announced the results of the first auction of greenhouse gas allowances to be used in California’s new cap-and-trade system, a successful event that sold approximately 30 million allowances.
California’s largest greenhouse gas emitters will begin buying permits in a landmark “cap-and-trade” system designed to control emissions of heat-trapping gases and to spur investment in clean technologies.
In January 2013, California will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit.
Since the signature of the Assembly Bill 32 Global Warming Solutions Act of 2006, California has set the new standards regarding environmental protection. AB32 was authored by Assembly Speaker Fabian Nunez (D-Los Angeles) and signed into law by Governor Arnold Schwarzenegger on September 27, 2006 with the goal to reduce greenhouse gas emissions to its 1990 levels by 2020.
“Tracking emissions is the first step toward figuring out how much it will cost you when you have to start paying for carbon,” Goldenhersh says. “It gives your CFO information like at $10/ton we will have $350 million in carbon exposure by 2013, so what do we do about that?”