The Rendering №11

The article “California's first auctionof greenhouse-gas credits nears” was published in The Los Angeles Times on November, 6. It discusses that after six years of preparation, California is poised to become the first state to combat global warming by capping greenhouse gas emissions and making major polluters pay to release more of these gases into the atmosphere. The author Marc Lifsher makes clear that it's part of a landmark law approved in 2006 that seeks to cut the state's production of carbon dioxide, methane and related gases to 1990 levels — about 17% lower than current amounts — by 2020. It is an open secret that on Nov. 14, the state is scheduled to launch the market-based "cap-and-trade" program of selling pollution credits at auction.

The reporter points out that this year, the program covers about 350 industrial businesses operating a total of 600 facilities throughout the state. They include cement plants, steel mills, food processors, electric utilities and refineries. Analyzing the situation it becomes clear that these businesses have been issued free credits worth 90% of their recent emissions. Now they must either cut their greenhouse gas production to that level or buy credits to make up the difference. The correspondent mentions that companies that have more credits than they can sell them at the auction and the state will sell additional credits as well. It’s necessary to make stress that opponents are petitioning the governor, lawmakers and regulators. Marc Lifsher makes clear their requirements: the state's requirement to buy pollution credits "will impose high and unnecessary costs on California businesses, threatening jobs and tax revenues in the state.

Regardless, the state has made it clear that it's moving ahead with the long-planned cap-and-trade approach. The approach "is a reasonable, well-thought-out program with rigorous reporting, monitoring and enforcement”. There are signs that each credit allows the release of one metric ton of greenhouse gases. The quarterly auctions, has set a minimum bid of $10 per credit, and it predicts that the price could rise to as much as $50 over the next eight years. It is an open secret that the system probably will prove expensive for Cal Portland Co., a Glendora cement maker with plants in Colton and Mojave. Another unhappy company is Pacific Coast Producers, a farmer-owned cooperative that has a tomato canning plant in Woodland, buying the credits it needs through 2020 would add as much as $2.5 million to the cost of canning tomatoes.

In conclusion the author suggests that California's cap-and-trade system is much more comprehensive and ambitious than the only other greenhouse gas auction in the country. Potentially, it could provide an example that other countries and larger organizations of countries could adopt, while we work out some of the kinks along the way. As for me, I approve of the auction because I think it will able to help our planet. Not many people all over the world care of environmental protection but citizens of California make an attempt to reduce greenhouse gas emissions and we should follow them and try to protect the Earth until it is too late.