Last Thursday the California Air Resources Board, with a 9-to-1 approval, voted in a critical piece of AB32 (the climate change law set to reduce emissions to 1990 levels by 2020). Beginning in 2012, the nation’s most comprehensive carbon trading program will take effect in California. This program will incentivize, through allowances and credit/offset purchases, businesses and factories to curb their emissions of carbon dioxide and other heat-trapping gases. Each allowance represents one ton of greenhouse gas emissions. The allowances will be mostly free for the first three years with the allowed emissions level declining annually.
When it comes into effect, companies over the allowed levels will either have to reduce their emissions or buy credits from other businesses to cover their excess. With a huge incentive to invest in clean technology, companies seeking reduction in emissions will be turning to green tech businesses to help shift their current emission levels. Also, green businesses already below the levels will be able to sell their credit to other companies and earn a profit.
Although it is too early to truly tell, this major change sounds like a great boost for green businesses everywhere and will hopefully spur economic recovery.
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