After a full day of testimony and deliberation on December 16, 2010, the California Air Resources Board (ARB) adopted the state’s Cap-and-Trade Program on a 9-to-1 vote. The Program is promulgated under the California Global Warming Solutions Act (A.B. 32) as a market-based compliance mechanism to help achieve reduction of the state’s greenhouse gas (GHG) emissions to 1990 levels by 2020. The 10-hour public hearing on the proposed regulation included more than six hours of public testimony, crisscrossing the broad spectrum of stakeholders with an interest in the Program. The large scope of comments made it clear that there were numerous details that still need to be resolved, and that litigation may be pending.

Indeed, even with the December 16 approval, there will be several modifications to the Cap-and-Trade regulation that was released in early November for public review, based on ARB staff-proposed changes presented at the hearing. These changes and other “conforming modifications” will be released for an abbreviated 15-day comment period. Staff will then continue to revise the fine points of the regulation that do not purportedly require further Board action, with a goal of having all the details of the Program confirmed by July 2011. ARB’s approval also included four protocols for creating offset credits. The Cap-and-Trade Program, which contains numerous convoluted provisions, consists of several major elements.

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If you have any questions about the issues of this update, please contact:

Lee N. Smith at (916) 319-4651 or
Allison C. Smith at (916) 319-4759 or