California Air Board's Final Cap and Trade Resolution Shows Public Input Did Not Fall on Deaf Ears

Yesterday, the California Air Resources Board finalized the Board Resolution accompanying the adoption of California’s landmark program to cap and steadily reduce carbon emissions across the economy.  The final resolution reflects changes the Board made after hearing from various stakeholders at a public hearing last December when the Board approved the program.

The resolution charts a course for CARB staff to follow in finalizing the remaining details before the program goes live in January 2012 and emphasizes the need for ongoing monitoring and adjustment as needed to ensure the program is delivering on its promise to curb pollution and drive innovation while maintaining California’s competitiveness. 

What the updated resolution readily shows is that the public’s input did not fall on deaf ears.

Responding to feedback from all corners at the December 2010 hearing, the Board’s final resolution directs CARB staff to pay close attention to impacts on small businesses and low income customers, the status of cost containment mechanisms such as the expected carbon offsets supply and allowance reserve, and the operation of the market to guard against manipulation and fraud.

Critically, the Board heeded recommendations from NRDC and other clean energy and public health advocates concerning the treatment of biomass and biofuels under the cap and the proper use of auction revenue.  The Board cited with approval the proposal developed by the Economic and Allocation Advisory Committee, an expert advisory committee formed to provide CARB with guidance on the proper distribution of allowances and use of allowance value, and called out specifically their recommendations on using auction revenues to make investments in low-cost emission reductions (including energy efficiency, public transit, transportation and land use planning, and R&D), adaptation and remediation in disadvantaged communities, and green job training.

The Board also gave more direction to the California Public Utilities Commission (which oversees the state’s investor-owned utilities like PG&E and Southern California Edison) and California’s municipal governing boards (who oversee the state’s publicly-owned utilities like LADWP and SMUD) on the use of allowance value in the utility sector.  The Board called particular attention to the need to offset any potential impacts of the program on low income customers and highlighted the opportunity for additional pollution- and utility bill-saving investments in energy efficiency programs above and beyond those already required by California law.

The Board’s final resolution suggests a promising start to a busy year ahead for CARB to ready the program for launch next year.  With a clear focus on continuing outreach to stakeholders, soliciting expert advice, and monitoring and adapting the program as needed,  Californians should take heart that their public officials are working to follow through on our state’s overwhelming support for developing clean energy solution under AB 32 in an open, responsive, and prudent manner.