The outsize goals of California’s new law, known as A.B. 32, are to lower California’s emissions to what they were in 1990 by 2020 — a reduction of roughly 30 percent — and, more broadly, to show that the system works and can be replicated.
The risks for California are enormous. Opponents and supporters alike worry that the program could hurt the state’s fragile economy by driving out refineries, cement makers, glass factories and other businesses. Some are concerned that companies will find a way to outmaneuver the system, causing the state to fall short of its emission reduction targets.
“The worst possible thing to happen is if it fails,” said Robert N. Stavins, a Harvard economist…
At first, only four means of carbon reduction will be approved for offset credits: timber management, the destruction of coolant gases, cuts in methane emissions from livestock waste and tree planting projects in urban areas. Already, developers of offset projects in more than 20 states are preparing to enter the new market, which for now accepts only credits generated in the United States. Some projects send coolant gases to be destroyed at an incinerator in Arkansas; others, tied to dairies in states like Ohio, Virginia and Wisconsin, will capture methane from livestock waste.
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