In 2013 California will go where no U.S. state has gone before – it will start a comprehensive emissions limiting program by employing the mandatory use of carbon credits throughout the state for large emitters. AB 32, the Global Warming Solutions Act of 2006, was passed by the state legislature and signed into law by Governor Schwarzenegger. It gives the California Air Resources Board (CARB) the power to start limiting carbon emissions on a small-scale immediately after the passing of the bill, and asks CARB to develop a long-term plan for the reduction of the state’s carbon emissions. The long-term plan will institute a carbon cap-and-trade program that is expected to reduce emissions by 2-3% per business each year until 2020. The plan will allow businesses to sell credits for excess carbon they reduce or buy credits if they are unable to do so. The plan starts in 2012 with present levels of carbon emissions, and reductions will become mandatory in 2013.

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California’s AB32 climate law isn’t popular with all residents. Some people fear that putting a dollar sign on the emissions of carbon from factories and power plants will make the companies that own those factories and power plants lay off workers. The state is trying to put the right spin on the story, however, by showing the public that establishing a market for carbon will create a whole new job market. For one, jobs will be created in the green collar market when factories install efficiency upgrades. In addition, once those factories become more energy-efficient, they’ll actually save money in the long run.

California’s law is impressive mostly because of its sweeping domain, it will have a positive effect on emissions markets across the U.S.’s largest state — something the U.S. Congress has been unable to do. The California law also opens up whole new emission markets that have never been seen before. NPR reports on one company which buys old refrigerators from people, removes the chlorofluorocarbon (CFCs) and other climate change-causing gasses in the foam of the refrigerator, and properly disposes of it. The disposal of this gas is counted as a credit by the state, and a company called Eos Climate buys those credits and then resells them to emitters in California who are unable to meet their reductions.

Hopefully, California’s legislation will create a real carbon market, where real people make money — not lose it — and they’ll show the rest of the United States that schemes like this are a positive part of our present and our future.

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