Despite business opposition, California's cap-and-trade auction starts Wednesday
Despite fierce opposition from much of the business community, California's grand experiment in taming global warming begins in earnest Wednesday. State officials are set to auction tens of millions of dollars' worth of carbon-emission allowances to scores of oil refiners, cement manufacturers and other large industrial polluters.
The computerized auction marks the beginning of California's "cap-and-trade" market. The market is the centerpiece of Assembly Bill 32, the state's 2006 law aimed at reducing greenhouse gases, and Wednesday's kickoff is being closely watched.
Cap and trade will force affected companies to scale back their carbon pollution – or purchase allowances to get into compliance. State officials and environmentalists say the market-based approach gives companies flexibility in how they reduce emissions.
Many affected businesses call it a cleverly disguised tax that will cost them upwards of $1 billion in the first year. The expense will balloon in 2015, when refineries will have to buy more credits to cover greenhouse gases spewed by cars and trucks.