Delay, Delay, Delay. California Puts The Brakes On Carbon Policy
California’s Air Resource Board (ARB) has decided to delay the entry into force of the long-awaited GHG cap-and-trade scheme from January 1, 2012 to January 1, 2013. The Californian Emissions Trading Program, which covers about 85% of state-wide emissions, is a key action to reduce greenhouse gas emissions to 1990 levels by 2020, mandated under California’s AB 32 law. On June 29 2011, Mary Nichols, California’s Air Resource Board Chairman announced the cap-and-trade programme is still scheduled to start in 2012 but requirements for compliance with the scheme have been delayed to 2013. Firms and entities regulated by the scheme are not be required to purchase and trade carbon allowances to cover their emissions until 2013.
On the East Coast, Governor of New Jersey Chris Christie announced in May 2011 that his State is likely to withdraw from the Regional Greenhouse Gas Initiative cap-and-trade scheme by the end of 2011. Not that RGGI has had much impact beyond acting as a proof of concept since its launch in 2009. So will California abandon its cap-and-trade framework?
Teething pains are often experienced with the implementation of major carbon policy frameworks. For example the oversupply of free allowances during Phase 1 of the EU ETS drove the carbon price down to zero in 2007. Yet the EU ETS will enter its third phase in 2013 and will provide an EU-wide cap on emissions and reduced access to project credits from outside the EU. Delay, yes. Policy disaster? Not yet.
- Tagged in :
- Environmental Policy & Regulation,
- Carbon Strategy
