SACRAMENTO – Today, the 16-member Economic and Allocation Advisory Committee (EAAC) released their final report of recommendations to California officials on a range of economic issues related to the possible design of a cap-and-trade system to reduce greenhouse gas emissions.
Today's final report includes key recommendations to help inform the development of a cap-and-trade program by the California Air Resources Board pursuant to the Global Warming Solutions Act of 2006 (AB 32). The proposal to return a large majority of the allowance value back to households is a significant departure from most federal proposals, as well as the existing Emissions Trading System employed in the European Union.
The EAAC recommends a "household friendly" approach to carbon regulation by suggesting that the majority of allowance value derived from California's cap-and-trade program be returned to households. Particular attention is recommended for low-income and disadvantaged communities to ensure they are not disproportionately affected by the program. Remaining allowance value is recommended to be used to ensure a level playing field for California's workers and industries and for public purposes that will also benefit consumers, including energy efficiency programs, research on clean technologies, climate change adaptation measures, and environmental remediation.
Cal/EPA and ARB asked the Committee to look at the allocation of emission allowances and the various options for distributing allowance value. It employed four criteria from AB 32 in developing the recommendations: fairness, cost-effectiveness, environmental effectiveness and simplicity.
Please press release with recommendations at arb.gov