California Shares Cap and Trade Info with Australia

 
A tanker truck passes the Chevron oil refinery in Richmond, Calif. California air regulators have agreed to share information with Australia regarding their cap and trade programs, which allow industries to bid on rights to emit greenhouse gases into the air. (AP)

California has found a carbon-cutting ally in the land Down Under.

State air regulators on Tuesday inked an agreement with Australia to collaborate on fighting climate change, primarily by exchanging ideas about each government’s fledgling cap and trade programs.

The memorandum of understanding spells out how their air agencies — the California Air Resources Board and the Australian Clean Energy Regulator — will ramp up a partnership that began informally over the past year. Among other information, they will share best practices for pricing carbon, policing polluters and studying the broad effectiveness of their cap and trade systems, the agreement said.  

Mary Nichols, chair of the California board, called the agreement “another step forward in California’s efforts to establish relationships with other programs to continue sharing information and best practices to fight the global danger of climate change.” 

The California program, rolled out late last year, allows companies and other entities to bid on rights to emit greenhouse gases into the air. The list covers public and private sector polluters, including Exxon Mobil, California Pacific Electric and the California Institute of Technology.

The state has auctioned off allowances to the state’s largest emitters, at prices near $14 per ton. By design, that money is intended to finance energy projects aimed at cutting carbon further, though environmental groups were irked in June when Gov. Jerry Brown, a Democrat, signed a budget that borrowed $500 million in program money for the state’s general fund — nearly twice what the auctions raised this year.

California’s program is not the first carbon trading system in the U.S. Nine New England states make up the Regional Greenhouse Gas Initiative, a pact that auctions pollution rights among utilities. But California’s project is far more ambitious, applying to large greenhouse gas emitters across the economy. As a result, other states have been watching the experiment.  

California will soon add another carbon trading partner besides Australia — and a more formal one at that. Next January, the state plans to link its market with Quebec, which has a similarly ambitious program.

Australia, meanwhile, plans in 2015 to link its market with the struggling European Union, where carbon prices have plummeted amid a glut in permits.

 
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