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California Cap and Trade
Cap-and-Trade / California

Meet your cap-and-trade obligations, through an effective strategy that brings carbon emissions, compliance, and your company’s objectives in sync with each other.

Supporting: Industrial facilities, in-state electricity producers, electricity importers, natural gas distributors, and fuel suppliers.

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Cut through the complexities – let's team up and craft a strategy that meets regulations and aligns with your company goals.

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California Cap-and-Trade Program

The Cap-and-Trade Program is a crucial part of California's plan to cut greenhouse gas (GHG) emissions, working alongside other measures to enforce emission reduction goals.

How does the Cap-and-Trade Program Work?

This program sets a decreasing limit on major GHG sources in California, providing a strong economic incentive for cleaner technologies.

Covering about 80% of the state's emissions, the program issues allowances equivalent to allowable emissions (the "cap"). An allowance represents one metric ton of CO2 equivalent emissions. These allowances decrease yearly, along with the cap.

With rising auction prices for allowances and reduced yearly allowances, a consistent carbon price signal is established, driving GHG reduction action.

Covered entities must still adhere to existing air quality permit limits for pollutants. Some covered entities may be allocated allowances, as well as purchase additional allowances from others or purchase offset credits.

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AB 32 Global Warming Solutions Act

AB 32 is a California state law designed to reduce greenhouse gas (GHG) emissions. It's a key component of the state's strategy to implement emission reduction goals.
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What is the purpose of AB 32?

AB 32 enforces a systematic approach to limiting significant sources of GHGs in California. It aims to encourage investments in cleaner and more efficient technologies.

AB 32 mandates that California achieve a 15 percent reduction in its greenhouse gas (GHG) emissions by 2020, aiming to reach levels equivalent to those in 1990.

Under this act CARB is obligated to formulate regulations that facilitate the most technologically viable and economical reductions in GHG emissions. The comprehensive execution of AB 32 is anticipated to diminish climate change-related risks by enhancing energy efficiency, promoting the utilization of renewable energy sources, fostering cleaner transportation, and curbing waste.

It's important to note that entities subject to AB 32's regulations must still adhere to existing air quality permit constraints related to criteria and toxic air pollutants.

Timeline of California’s Cap-and-Trade Program

June 2005: Executive Order S-3-05 signed by Governor Schwarzenegger, sets emission reduction targets for California to reduce Green House Gas emissions to 80 percent below 1990 levels by 2050.

September 2006: Assembly Bill 32 (AB 32), signed into law by Governor Schwarzenegger, is a California regulation mandating a reduction in the state's greenhouse gas (GHG) emissions to 1990 levels by 2020.

January 2013: Introduced by CARB, California's Cap and Trade program opened its tracking system in 2012 and launched the program with compliance obligations in January 2013.

January 2017: Senate Bill 32, increases and extends the emission reduction mandate to 40 percent below 1990 levels by 2030.

July 2017: Assembly Bill 398 extended the authorization of the cap-and-trade program through 2030.

July 2017: Assembly Bill 617, sets up air monitoring plans and selection of high-priority areas in need of air monitoring systems.

 

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