In an attempt to forge consensus among environmental justice and business advocates, the Coalition for Clean Air is proposing that California go forward with a carbon trading program. But, it proposes a trading scheme that includes restrictions and mitigation fees for companies that operate in areas with high levels of smog and toxic air pollution. In a document released May 5, the coalition proposes that the California Air Resources Board create a community benefits fund. Initially it would be funded with some of the proceeds from an emissions credit auction or carbon tax. Money would be used to improve energy efficiency and mitigate toxic and smog-forming air pollution in the polluted areas. Its proposal comes as the Air Board is racing to develop a master plan by early this summer for carrying out the state\u2019s climate protection law, AB 32. Environmental justice groups have said the plan should not provide for emissions trading because it will jeopardize public health. However, many businesses are seeking a freewheeling carbon market they say will lower the cost of cutting greenhouse gases. To keep the fund going on a long-term basis, the coalition envisions that companies in those zones would have to pay a surcharge to the state whenever they purchase credits or offsets in lieu of cleaning up their own plants to meet carbon reduction mandates. The fees would be placed into the community benefits fund. Local cities, community groups, and air districts would be involved in deciding how the fund should be administered to improve the environment and public health in the areas around power plants and other industries in the zones, said Shankar Prasad, coalition executive fellow. The proposal, he explained, is founded on the proposition that companies that buy emissions credits instead of reduce greenhouse gas emissions would continue to emit other unhealthy pollutants at the same level. This would force their neighbors \u201cto bear a higher burden of pollution exposure\u201d than those living around plants that cut greenhouse gases, he said. Cutting greenhouse gases almost always automatically cuts associated emissions of toxic and smog-forming pollutants. Under the plan, the Air Board would identify areas where pollution already is disproportionately high and determine which power plants and other industrial facilities lie in those zones and would be subject to the fees. The coalition also raises the prospect of putting time limits on the use of emissions credits and offsets by those companies.