Calif budget to include CO2 auction revenue-Point Carbon
Fri, 16 Dec 2011 01:39 GMT
By Rory Carroll
SAN FRANCISCO, Dec 15 (Reuters) - California Governor Jerry Brown said on Thursday his 2012-2013 state budget will assume $300 million to $600 million in revenue from the sale of CO2 permits.
Speaking on the sidelines of a conference in San Francisco on the risks of climate change, Brown told Point Carbon that the state spending plan he will unveil next month will for the first time include the new revenue stream for California's cash-strapped government.
"We'll be assuming a certain amount of revenue in the coming budget," Brown said.
California will hold its first carbon allowance auction in August, but how revenue from the sale of permits to manufacturers and electricity providers will be allocated has yet to be decided.
"We are working with the governor's office and the Department of Finance on a range of scenarios and options," said Stanley Young, a spokesman for the California Air Resources Board, the state agency that designed the state's cap and trade program.
Environmentalists say money raised by the climate change program should be spent to further reduce greenhouse gas emissions and improve energy efficiency.
"Reinvesting program dollars on clean energy solutions that further cut climate pollution or increase California's energy efficiency is proven to create jobs and economic growth," said Tim O'Connor, director of the Environmental Defense Fund's California Climate and Energy Initiative.
California State Assembly Speaker John Perez, a Democrat, is expected to release a bill next year spelling out how the revenue should be spent, a source at the conference said.
Brown said he is confident California's cap and trade system would help the state meet its goal of reducing its greenhouse gas emissions to 1990 levels by 2020.
He said California has learned from mistakes made in the European cap and trade system, where prices have plummeted in recent days due to an oversupply of allowances and a dim economic outlook.
"I believe our Air Resources Board is one of the most skilled regulatory bodies in the world and I intend to work very closely to implement the program," he said. "If it can work, we will make it work." (Reporting by Rory Carroll of Point Carbon, a Thomson Reuters company, rory.carroll@thomsonreuters.com; Editing by Gary Hill)
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