Cap and Trade Revenue Bill Approved in California

It is anticipated that California will collect more than $1billion a year in revenue from selling allowances in the state’s CO2 cap-and-trade market.[1] On Tuesday May 29th 2012, the California Assembly voted to approve AB 1532, a bill that provides the foundation for how the state will spend revenue generated from its carbon market.

California’s cap-and-trade program begins on January 1, 2013. The launch will be preceded on November 14 by the first of three state-run carbon allowance auctions scheduled for its 2012-2013 fiscal year.[2]

With auction revenue predictions of over $1 billion, Governor Jerry Brown has found relief that will aid him in addressing California’s enduring budget shortfalls.

AB 1352 designates five broad categories as permissible expenditures for auction revenue: renewable energy and energy efficiency; low-carbon transportation and infrastructure; natural resource protection; research and development; and empowering local leadership climate change planning and implementation.[3]

The bill would create the Greenhouse Gas Reduction Account within the Air Pollution Control Fund, which is controlled by the Air Resources Board (CARB). AB 1352 would further direct CARB, the agency tasked with administering AB 32, California’s pioneering climate change law, to develop an investment plan for the auction revenues every three years.[4]

AB 1532 still needs to go through Senate but it is likely to pass. Approval of this bill positions California as a leader in battling climate change, while still encouraging the growth of their economy under the umbrella of sustainability.


Drafted by ZACL Summer Law Student Jessica Vaianisi

[1] CleanTechLaw, California approves cap-and-trade revenue bill, online: <>.

[2] Ibid.

[3] Ibid.

[4] Ibid.