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A proposal to put climate legislation on hold in California, which would also have had serious consequences for similar laws in neighbouring states, was safely defeated yesterday when it was put to a public vote. ‘Prop 23’ as it was known called for a suite of climate and energy laws be suspended until unemployment figures dropped significantly.

Backed by big oil companies and the notorious Koch brothers the campaign in favour tried to make a false distinction between action to protect and create jobs and action to move to a sustainable energy future.

In what was described as “the first and [largest public referendum](http://www.grist.org/article/2010-11-02-california-clean-energy-climate-trifecta-boxer-brown-prop-23 “Grist article”) in history on clean energy policy” voters have clearly shown that they don’t believe the two are incompatible and that California’s future prosperity can be secured through investment in cleaner technologies.

In this hard fought campaign the fact that Silicon Valley and Hollywood billionaires raised more money than big oil is one of the most optimistic signs that the forces in favour of action are now gaining the upper hand. Furthermore the victory was arguably secured even before Clean Tech outspent Old Oil, through a passionate [grass roots campaign](http://www.huffingtonpost.com/becky-bond/california-voters-say-hel_b_778025.html “Huffington Post”).

**California Cap and Trade**

A major component of the bill prop 23 was trying to reverse is the introduction of a statewide cap and trade system – due to start in 2012. The Air Resources Board responsible for implementing the scheme published details for the proposed system last Friday and are now inviting public comment ahead of a vote on December 16th.

Looking over the proposals there are some good elements but also some of the usual problems that bedevil legislation of this kind. The most significant being the relatively low level of ambition which was set out in the law (a return to 1990 levels by 2020). The extent to which targets can be ‘offset’ and the inclusion of forestry credits in those offsets are also cause for concern. On the plus side, however, the designers have obviously looked hard at the EU’s carbon market and include a number of important measures that are improvements on the EU system.

Here’s our quick summary:

Pluses:

– good coverage (85% in 2015) including transport and heating fuels
– covers imports of electricity from out of state
– clear emissions reduction trajectory to 2020
– a strategic reserve created to moderate supply of permits
– some auctioning and floor price established for the auction (though v low at $10 a tonne)
– free allocation by benchmarks which update to take account productivity
– provision to set aside/cancel permits to protect voluntary uptake of renewable – tariffs
– market is open to public to buy and cancel permits
– annual reporting requirement on all participants – but will the data be made public?

Minuses:

– low overall ambition (return to 1990 by 2020 as set in AB 32)
– too much offsetting allowed (8% of emissions)
– inclusion of forestry and potentially REDD credits in offsets
– no trajectory for emissions reductions beyond 2020
– 3 year compliance periods allow a lot of flexibility
– late start for transport (they enter the system in 2015)