California regulators on Thursday approved final regulations for a carbon market that is one of the biggest U.S. responses to climate change.
The state believes the market for greenhouse gases, which starts in 2013, will let it address global warming in a low-cost way and become the center of alternative energy industries, like solar, although some businesses fear higher energy prices.
The most populous U.S. state is moving ahead with the plan years after federal regulators rejected a similar idea for the nation, partly on concerns of the effect on businesses.
The California Air Resources Board voted 8-0 to adopt the market regulations, which officials said are critical to the state’s goal of cutting carbon emissions to 1990 levels by 2020 — about a 22 percent reduction from forecasted business-as-usual output.
Power companies and factories will be able to trade a gradually decreasing number of permits to emit carbon dioxide and other greenhouse gases under the so-called cap-and-trade plan, which counts on market forces leading companies to find the cheapest way to cut emissions.