California holds first cap-and-trade auction to stem global warming
SACRAMENTO -- California environmental officials went ahead with a planned, first-ever auction of greenhouse gas pollution credits despite a last-minute lawsuit filed by the state Chamber of Commerce.
On Wednesday, the Air Resources Board manned computer terminals to take bids from some major industrial facilities such as cement plants, steel mills, refineries and food processors. Many companies that emit carbon dioxide, methane and other gases that contribute to global warming were expected to participate in the three-hour sale of so-called cap-and-trade credits.
Polluters initially get 90% of their needed credits free. But, they are required to buy more if they plan to release carbon dioxide and other greenhouse gases above their allotted levels. Pollution credits start at a minimum price of $10 for the right to emit one metric ton of greenhouse gases.
Results of the auction, including prices and volume, will be made public Monday.
The auction is the first held by any state in the nation and proponents hope it will be a model for an eventual national cap-and-trade system.
Opponents brand the system as a new pollution tax and say it is unfair to large businesses and a job killer. This year, the program covers about 350 industrial businesses operating a total of 600 facilities throughout the state.
On Tuesday, the California Chamber of Commerce sued in Sacramento County Superior Court, challenging the state’s authority to raise revenues from sale of the credits. The quarterly auctions are expected to generate about $1 billion in their first year.
The Air Resources Board said it’s “confident that the cap-and-trade program will withstand any court challenge.”
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