California’s ‘carbon market mandate’

Announced is California’s Bill for funding green industries, also known as the ‘carbon market mandate’. The headline “State’s Biggest Polluters to Become Funders of Sustainable Farms posted by Takepart.com  – Sun, Oct 7, 2012” and is an intriguing insight into what they are doing and what we are tackling here in Australia in terms of the Carbon Farming Initiative.  Have we got it wrong? Too many initiatives and not enough carrots, and CO2land org has previously published that the Nuffield Australian Farming Scholars say that the long-term capacity of Australian agriculture to compete and succeed internationally will be determined by the ability of Australian farmers to recognise changing consumer preferences, adopt new technologies and production practices and maintain the sustainability of their operations by protecting their production environment  (posted on July 6, 2012 by co2land  “The most innovative Australians are Farmers”).

Looking at what the Californian’s have done: They have taken the approach that big business can be encouraged from polluting the environment, and they can be simultaneously funding green industries through an auction permit system. The move is under the California state passed Assembly Bill 1532 (AB 1532), also known as the “carbon market mandate.” It is labeled as a boon for the state, environmentally and financially. Significant fees are levied to major corporate polluters, and those fees are invested into eco-friendly businesses that reduce greenhouse gas emissions. The state aims to reduce its greenhouse gas emissions by 80 percent by the year 2050.

The official start for the purchase of permits at auction (called “carbon pollution allowances”) starts November 2012. It obliges the state’s biggest greenhouse gas emitters― like power plants and large manufacturers to participate and “the revenue from those auctions is expected to reach into the billions of dollars in the next year, pumping some desperately needed funds back into California’s economy”, Forbes reports.

CO2Land org has noted it is intended that auction revenues channel into green businesses, this includes sustainable farming, and to be encouraging corporate polluters to find more eco-friendly methods of conducting business. In their states ‘approved list’ a green business includes sustainable agriculture and this includes farms that “sequester carbon” with methods like reducing soil tillage, practicing water and energy conservation, and reducing synthetic fertilizer use through compost, cover crops, and crop rotation.

If you are thinking California is the first state in the US to try a carbon market mandate of some sort, you might be interested to know that Grist reports “that a group of northeastern states, called the Regional Greenhouse Gas Initiative (RGGI) has been practicing a similar system since 2008. But in RGGI’s case, it charges carbon allowances exclusively to power plants, whereas California’s plan spans across all sectors of business, dependent on a company’s overall pollutants, not its category”.

As you would expect arguments are springing that the plan for the carbon market cap could be bad for business; it will put too high of a burden on companies, which in turn will either wither and close, or will force those costs onto their customers. It is an interesting experiment to follow and right or wrong CO2land org understands the motivation of the state of California: To not destroy its environment for the sake of boosting commerce. There is no time left to experiment with the future.

 

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