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California Carbon Market |
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California carbon market is an administrative effort by the California Government to limit pollution by allowing economic incentives. It is now regarded as the most energy efficient state on a per capital basis.
AB-32
California carbon market is the United States' first carbon market. It is based on the cap-and-trade system that has proved successful in decreasing air pollution in rest of the United States. The California legislature passed the Global Warming Solutions Act, AB-32 in 2007. A carbon project would led to the formation of offsets by proving the reduction of carbon dioxide and other equivalent gases. Project types include SF6, forestry, manure management, landfill gas and building energy. Voluntary reporting on California Climate Action Registry will became mandatory from 1st January, 2009. Emission caps are being developed for individual industry sector. The aim is a 175 million tonne emissions reduction by 2020.
Trading
The greenhouse gas market has been trading credits from projects that absorb greenhouse gases like capturing landfill gases and planting trees. Companies that choose to be environmentally responsible buy credits for these projects-known as 'offsets'. Many companies voluntarily reduce their emissions. The Californian government wish to reward these companies by granting limited allowances to emit greenhouse gases in 2009 and 2012.
Prices of voluntary credits differ from $1 per tonne of carbon dioxide to $6 a tonne. This price is based on a number of factors including the location of the project, type of project, and the year the reduction took place.
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