Cap-and-Trade Proceeds in California, Governor Signs Solar Bills

California’s Air Resources Board (CARB) can proceed with implementation of the state’s cap-and-trade program, a Supreme Court judge ruled Wednesday.

The program, which was announced in November 2010 after four years of development, has been held up because of a March court ruling that requires CARB to further examine alternatives to cap-and-trade that might be better routes to reducing greenhouse gases.

CARB says it did adequately consider alternatives such as a carbon tax, and is appealing the decision in Superior Court.

This week’s ruling allows CARB to move forward on cap-and-trade before the Superiour Court rules.

Cap-and-trade is a key component of AB32, California’s 2006 landmark climate change legislation, which attempts to fill the yawning gap left by the lack of federal policy. Under the law, California must reduce greenhouse gas (GHG) emissions to 1990 levels by 2020.

California’s cap-and-trade program sets industry-wide limits on GHG emissions for the first time in the US. A similar national system has successfully reduced acid rain for decades.

Companies that exceed industry emissions limits can buy carbon allowances from cleaner companies that can meet those limits as well as buy carbon offsets. Industry emission limits become more stringent each year through 2020.

It provides an overall limit on emissions from sources responsible for 85% of California’s GHG emissions.

Carbon trading was scheduled to begin in 2012, until a court put a hold on it pending further analysis. 

Wednesday’s court order was issued in the case of California Air Resources Board vs. Association of Irritated Residents, in which antipoverty "environmental justice" organizations, argued a market-based approach exposes poor and minority communities to higher levels of pollution.

In response to the ruling, attorney Alegria De La Cruz of the Center on Race, Poverty and the Environment, says, "This case is far from over."

CARB counters that the program allows businesses the greatest flexibility for compliance, stimulates clean energy technologies, increases energy security and independence, protects public health and will drive clean energy jobs in California. It’s designed to work in collaboration with other complementary policies that expand energy efficiency programs, reduce vehicle emissions, and encourage innovation. 

Governor Brown Signs Important Solar Bills  

Last week, Governor Brown signed two bills intended to maintain the state’s status as a leader in solar energy.

Senate Bill 585 authorizes a budget increase for the California Solar Initiative, an incentive program created in 2006 to drive the installation of 3,000 megawatts (MW) of rooftop solar by 2016, bring down the cost of solar, and create a vibrant solar industry in the state.

The program is so successful, that after four years, over 800 MW have been installed – more than all but four countries in the world. 

Solar prices have come down significantly. If costs continue to decline at the same rate as expected, residential solar will pass the break-even point by mid-2014.

Assembly Bill 1150 extends the Self Generation Incentive Program, which provides rebates for wind, fuel cells, and other renewable technologies that generate electricity on-site.  

Governor Brown has called for building 12 GW of rooftop solar and other forms of small scale renewable energy by 2020,  enough energy for 9 million single-family homes. 

Here’s the California cap-and-trade program: