A key state advisory committee advocates auctioning carbon allowances and using the revenues to subsidize projects to curb global warming gases. The Economic and Technological Advancement Advisory Committee, which is advising the California Air Resources Board on how best to implement the state’s climate protection law, AB 32, recommends establishing a carbon incentive fund to jump start emission reductions in sectors covered by a mandatory cap--including utilities and oil refineries--as well ones outside. In a draft report released November 19, the committee, known as ETACC, calls for an auction-funded subsidy before AB 32, which mandates a 25 percent cut in carbon by 2020, goes into full effect in 2012. The fund is seen as a complement to a cap and trade program. ETACC was created by AB 32 to advise the Air Board on strategies to curb greenhouse gases to reach the law’s reduction targets. Unlike the now-defunct Market Advisory Committee, which was formed by a governor’s decree, the statutorily created economic and technological committee’s meetings and deliberations are open to the public. The report suggests a key goal of an auction is to test the carbon market waters. A crucial issue in AB 32 implementation is who will reap the benefits of a carbon market--the state or private entities. If the Air Board calls for a sale of carbon allowances via an auction it can use the revenue for the public good. The other choice would be to give carbon credits away to utilities, refineries, and other businesses regulated by AB 32, ensuring private gain. Another aim of the proposed California Carbon Trust is to bolster global warming reduction projects inside and outside poor polluted communities. The carbon fund could help overcome barriers to struggling, emerging greenhouse gas reduction technologies by directing public money to areas not attracting private capital, the report concludes. It also calls for limits on carbon offsets to encourage innovation in certain sectors. Getting top billing for carbon curbing strategies in the energy sector are technologies that advance energy storage, and a hi-tech grid that promotes efficiency and distributed renewable energy projects. It also throws its support behind plug-in hybrids and electric battery run vehicles. To encourage utilities and other polluting companies to take early actions- reduction measures that kick in prior to AB 32’s mandate--it recommends creating a banking mechanism that assigns a value to carbon reduction measures “to encourage consumer confidence in the emerging California Climate program.” Also called for by the report is a five-year “Buy California” program to promote the state’s clean tech manufacturing. “California lacks sufficient incentives and faces barriers to developing a strong Clean Tech manufacturing sector,” it states. The draft report will be discussed during a November 29 committee meeting held in Merced. Editor’s note: For a more detailed version of the committee’s report story, please see our sister publication E=MC2, Energy Meets Climate Challenge, www.energymeetsclimate.com
