California Senate approves GHG cap; Assembly to vote Thursday

California Senate approves GHG cap; Assembly to vote Thursday

San Francisco (Platts)--31Aug2006

The California Senate in a 23-14 vote late Wednesday passed landmark
legislation that would make California the first US state to cap greenhouse
gas emissions from industrial sources.

The bill, AB 32, was headed to the California Assembly for a final vote
after it cleared the Senate. It needs to pass the Assembly Thursday, the
deadline for the legislative session.

The measure would require the state's major industries to reduce GHG
emissions by about 25% by 2020 and would codify GHG reduction targets set by
California Governor Arnold Schwarzenegger last year.

Still, Schwarzenegger faced pressure to oppose AB 32 from a number of
businesses, who said it would push up energy costs and drive businesses out of
the state.

The governor had been at odds with the bill's authors over emissions
trading, with the governor saying a cap-and trade system should be mandatory.
The bill's authors, Assemblywoman Fran Pavley and Assembly leader Fabian
Nunez, pushed for emissions trading to be optional.

But the governor on Wednesday said he had struck a deal with the state's
Legislature on AB 32 and he expressed support for the bill.

The sky is not falling because of global warming, "but it may be
melting," said Senate President Pro-tem Don Perata, before the vote. "This is
a responsible vote" for a bill that will help create jobs in the state, he
added.

The final version of AB 32 requires the California Air Resources Board to
adopt regulations to require reporting of GHG emissions by 2008. The board
will be required to adopt regulations for GHG reductions, and enforce the
reductions starting in 2012. The board will have authority to adopt
regulations on the use of market-based mechanisms to achieve GHG reductions.

The bill allows the governor to suspend implementation of the regulations
for up to one year, in the event of catastrophic circumstances or threat of
significant harm.

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