After months of negotiations, and intense support from Governor Jerry Brown, on July 17 California extended its Cap-and-Trade program with two-thirds super majority support in both chambers of the California Legislature. AB 398 reauthorizes the continuation of the program but with several significant changes. The industry’s primary focus was cost containment and those issues were addressed in the legislation. The new legislation: ensures that industry assistance levels will remain at 100% for both the third compliance period (2018-2020) and post-2020; imposes a carbon price ceiling and "speed bumps" to limit potential price spikes; and increases CARB accountability by mandating additional oversight and reporting requirements and annual economic analyses.CLFP will continue to engage in the development of this regulation.

AB 617, the companion bill to AB 398 extending the Cap-and-Trade regulation post-2020, is not expected to be the subject of a CARB hearing until this fall. AB 617 requires CARB, in consultation with local air districts, to develop a community monitoring program plan and to identify communities for such monitoring. CARB must also develop a statewide plan to reduce toxic air contaminants and criteria pollutants, and air districts in nonattainment are now required to develop an implementation schedule of best available retrofit technology at industrial facilities covered under the Cap-and-Trade program by December 31, 2023.

 

For more information about Cap-and-Trade, contact John Larrea at CLFP. 

 

By John Larrea, CLFP Government Affairs Director