Kristin Eberhard, Legal Director, Western Energy and Climate Projects, Santa Monica

Next week’s scheduled practice auction of greenhouse gas allowances for California’s largest polluters will provide an important first look into how the state’s cap-and-trade program, a key element of the Global Warming Solutions Act (AB 32), will work going forward.

With millions of dollars worth of allowances planned to be auctioned in the coming year, and everyone watching to see whether California can successfully implement the nation’s first economy-wide cap-and-trade program, it’s important to get this right. These allowance auctions are an important part of the plan to reduce carbon pollution to 1990 levels by the year 2020.

Although the California Air Resources Board announced in March it would delay the first auction of carbon permits from August until Nov. 14, and instead hold a trial run this month, it is prudent to try the system now and give participants an opportunity to test out and understand the process. As Board Chair Mary Nichols told Bloomberg News last week, “We're in the process of cleaning up every loose end or issue that hasn't yet been definitively addressed.”The goal is to make sure the quarterly auctions that follow go smoothly.

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