California Gov. Jerry Brown’s administration yesterday released a plan to extend the state’s landmark cap-and-trade program in a bid to slash greenhouse gas emissions through midcentury.
The California Air Resources Board (ARB) proposed amendments to the program yesterday evening that envision a carbon market through 2050 with increasing allowance prices, sending a signal to businesses that have been waiting to see if they should keep participating in the state’s quarterly auctions.
The plan to extend the carbon market comes as state lawmakers and Brown (D) are engaged in negotiations to set a new overarching emissions target for 2030. It’s unclear whether ARB has the authority to go beyond 2020 currently, thanks to a combination of potentially limiting language in the original climate law, A.B. 32, and a lawsuit challenging the legality of cap-and-trade auctions under a law requiring a two-thirds legislative majority to approve taxes.
“Looking at the amendments and the adjustments made, it looks like they responded to the uncertainties that are out there,” said Steve Frisch, president of the Sierra Business Council, a group of 4,000 businesses based in the Sierra Nevada that advocates for climate- and environment-friendly policies. “They created more of an opportunity for allowance reserves; they really created mechanisms for bringing allowances back into the market to stabilize prices if they fluctuate dramatically.”