California Assembly Bill 32: GHG Cap and Trade Program

In 2006 the California State Assembly passed Assembly Bill 32, or the California Global Warming Solutions Act. AB-32 appointed the Air Resources Board as lead agency to implement a reduction in greenhouse gas (GHG) emissions back to 1990 levels by 2020. One of the ways that the ARB is facilitating this reduction is through the development and implementation of California's first GHG emissions cap and trade program. The program sets a maximum amount of allowable emissions for the industry (the "cap") then enables individual businesses to "trade" emissions allowances . Trading creates incentives to reduce GHGs below allowable levels through investments in clean technologies.