California Air Resources Board Amends Cap-And-Trade Regulations

On December 13, 2018, the California Air Resources Board ("CARB") adopted amendments to California's cap-and-trade regulations to implement statutory directives under Assembly Bill 398 (2017) ("AB 398"). Cap-and-trade regulations require large-quantity greenhouse gas ("GHG") emitters in California to surrender allowances or credits in proportion to their GHG emissions; create a market for allowances and credits; and set a declining annual cap on the number of such allowances issued by the state, thereby creating market pressures for regulated entities to reduce GHG emissions. AB 398 extended the cap-and-trade program until 2030, the deadline by which the state must achieve its target GHG emission level of 40 percent below 1990 levels. AB 398 also directed CARB to promulgate new regulations amending the program. Most of the amendments take effect January 1, 2021.