The electricity sector emits about 25 percent of the state\u2019s greenhouse gases, but the joint California Public Utilities Commission-Energy Commission proposal for cutting the gases expects utilities and generators to cut their combined emissions 40 percent by 2020, according to a document released September 12. The transportation sector is the largest emitter of carbon emissions in the state. The hefty document was a variation on the agencies\u2019 initial proposal released last March. Like its predecessor, the final draft makes power generators responsible for meeting AB 32\u2019s reduction mandate. The final plan expects the vast majority of global warming gas decreases to come from increased energy efficiency and renewables. It specifically calls for a doubling of energy efficiency from public and private utilities and boosting the renewables mandate from 20 percent in 2010 to 33 percent by 2020. The plan projects more efficient homes and offices and tighter appliance and building standards will save 32,000 GWh and 800 million therms of natural gas. The plan specifically aims to double efficiency via zero net energy residences by 2020 and zero net energy commercial buildings by 2030. However, the state\u2019s investor-owned utilities are balking at the commercial building target, claiming it would be too costly. They outlined their concerns in comments filed last week on the CPUC\u2019s related long-term efficiency plan for the three private utilities. The greenhouse gas decision, which both commissions are expected to approve in mid-October, continues to support a carbon-cap-and-trade market, and one that is multi-sector and regional. A carbon trading market is estimated to cut electricity\u2019s carbon emissions by another 10 percent or more, the proposal claims. The agencies declined to include the natural gas sector in a cap-and trade market, emphasizing as before, that efficiency and big increases in solar water heaters will provide necessary emission reductions in this area. The plan also recommends that only 20 percent of emissions rights be auctioned off in 2012. The other 80 percent of carbon allocations are to be given away for free to the power producers and private and public utilities. For the next four years of the program, the amount of carbon allocations auctioned is to grow by 20 percent annually until 100 percent of the carbon credits are auctioned in 2016. \u201cA transition to auctioning would help protect ratepayers if problems arise as this massive regulatory shift is undertaken and experience is gained with the auction process,\u201d joint agency document states. The commissions urge that the state be a part of the regional carbon trading market expected to be launched by the Western Climate Initiative. Their report also advocates a significant expansion of cogeneration facilities in the state, which are considered to be far cleaner than traditional generating units. Carbon offsets could be used to meet carbon reduction requirements. Offset projects would not be subject to geographic limits. There also would be no expiration date on offset banking or savings. Once the energy agencies sign off on the final blueprint, it will be forwarded to the California Air Resources Board. That agency is responsible for implementing the state\u2019s climate change law. The law requires a 30 percent cut in the state\u2019s emissions from 1990 levels by 2020.