California May Start Carbon Trade Without Allies, Chief Says

California, which is seeking to build a regional carbon market for the U.S. West and parts of Canada, may start its cap-and-trade program next year even if other jurisdictions aren’t ready, a state official said.

“We could do the program on our own, but we’d rather not,” California Air Resources Board Chairman Mary Nichols told reporters today after speaking at an International Emissions Trading Association conference in Washington.

The air resources board last year identified New Mexico and Quebec, Ontario and British Columbia in Canada as governments that may be ready to join a regional carbon market in 2012. California approved its cap-and-trade regulations in December.

California’s planned carbon market is similar to the cap- and-trade program that President Barack Obama failed to push through Congress last year. Power plants, oil refineries and factories would buy and sell pollution allowances that each represent one metric ton of carbon dioxide. The supply of allowances would be trimmed over time to enforce a 15 percent cut in carbon dioxide and other greenhouse gases linked to global warming by 2020.

A lawsuit by an environmental group won’t stop the program from starting next year, Nichols said. The Center on Race, Poverty & the Environment is among advocacy organizations that are suing the Air Resources Board to force reconsideration of its greenhouse-gas regulations. The board’s climate-change rules don’t satisfy a requirement in the state’s 2006 global-warming law to clean up poor, polluted neighborhoods, the groups said.

State Lawsuit

The San Francisco County Superior Court sided with the groups in a preliminary ruling in January.

If the lawsuit succeeds, it would only require more environmental studies, Nichols said.

“It would not necessarily have any impact on the implementation of the cap-and-trade rule,” Nichols said in remarks at the conference. “There have been quite a few political scuffles, skirmishes or even battles” over the state’s global-warming law, Nichols said. “I’m sure there will be more as we go forward.”

To contact the reporter on this story: Simon Lomax in Washington at slomax@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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