Greenhouse Gas Legislation: All Eyes on California

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Interest groups following climate change are closely watching the cap-and-trade program recently proposed by the California Environmental Protection Agency’s Air Resources Board (CARB). With national legislation stalled, what happens in California is viewed as an important next step.

CARB recently released a preliminary draft regulation (PDR) that identifies sources of emissions to be capped and the general timeline under which emission allowances must be obtained by capped industries.

 Under California’s Global Warming Solutions Act (AB 32) passed in 2006, the state must reduce its greenhouse gas emissions to 1990 levels by 2020.

Starting with the first phase of CARB’s plan in 2012, electricity generation and industrial sources and processes emitting 25,000 metric tons of carbon dioxide equivalent or more would be capped.

 Brent Erickson, executive vice president of BIO’s industrial and environmental section, says that although BIO understands the intent of the PDR, its concern is that the proposal may discriminate against biofuels used in the transportation sector.

 “BIO firmly believes that biofuels should play a pivotal role in reducing greenhouse gas emissions in transport,” says Erickson. “To do so, the cap-and-trade program must recognize biomass as a renewable energy resource that produces no net greenhouse gas emissions upon combustion.”

He points out that it is well understood that the carbon content of biomass released upon combustion is offset completely by the uptake of atmospheric carbon in the biomass.

Therefore, says Erickson, when combusted as a fuel source, whether in power plants or in automobiles and trucks, biomass produces no net greenhouse gas emissions that contribute to global warming.

“Expansion of biomass as a fuel source, including biofuels, will allow California to displace large volumes of fossil fuels, thereby achieving substantial and immediate reductions in the state’s greenhouse gas emissions,” Erikson adds.

California is home to numerous biotechnology companies and research centers developing biofuels from biomass. Restrictive rules could endanger their ability to raise investment capital to fund their continued research and development.

CARB is expected to finalize the cap-and-trade program toward the end of 2010, with the program’s first phase to start on or before January 2012.