The California Air Resources Board on Thursday unanimously adopted the nation's first state-administered cap-and-trade regulations, a landmark set of air pollution controls to address climate change and help the state achieve its ambitious goals to reduce greenhouse gas emissions.

The complex market system for the first time puts a price on heat-trapping pollution by allowing California's dirtiest industries to trade carbon credits. The rules have been years in the making, overcoming legal challenges and an aggressive oil industry-sponsored ballot initiative.

The air board met in Sacramento for more than eight hours in a packed hearing room. Board members listened to sometimes scathing comments from union workers fearful of losing their jobs and a parade of industry representatives who likewise characterized the regulations as anti-business. Other speakers called the proposal historic and groundbreaking.

Late in the day, as the eight board members voted to approve the regulations, to scattered applause, Chairman Mary Nichols looked up and said, "We've done something important. Cap-and-trade is a new tool that for the first time allows us to reward companies for doing the right thing."

Cap-and-trade is the centerpiece of AB32, California's historic climate change law that mandates a reduction in carbon pollution to 1990 levels by 2020. Beginning in 2013 the state's largest carbon emitters will be required to meet the caps or buy credits if they cannot.

A second phase of compliance begins in 2015 and is expected to include 85% of California's emissions sources...

The vote was closely watched by other states and, if the program is deemed successful, it will likely serve as a model for future markets. The US Congress has rejected a similar national program.

READ FULL SOURCE ARTICLE: 10/21/2012