[JURIST] California’s Air Resources Board [official website] on Thursday approved measures that will provide incentives to companies and factories that decrease their greenhouse gas emissions [JURIST news archive]. The provisions are envisaged under Assembly Bill 32 (AB 32) [text, PDF; official backgrounder] and include a permit system [AP report] in which companies are allotted a quota of greenhouse emissions. If a company does not use all of its quota, it can sell to a company that is going to exceed its quota. Companies that exceed their quota can purchase “offsets” from companies involved in activities that lessen greenhouse emissions, like forestry. The program is reportedly the first of this type in the country. Supporters of the bill in California say they felt compelled to enact AB 32 after Congress failed to approve greenhouse gas reduction legislation. They hope they other states will follow suit.

In June, the US Senate [official website] defeated a resolution [materials; JURIST report] aimed at limiting the ability of the Environmental Protection Agency (EPA) [official website] to regulate greenhouse gas emissions under the Clean Air Act [materials]. The US Supreme Court [official website] affirmed the EPA’s ability to regulate carbon emissions under the Clear Air Act in its 2007 ruling in Massachusetts v. Environmental Protection Agency [Cornell LII backgrounder; JURIST report]. In its ruling, the court held that if the EPA could show a link between greenhouse gas emissions and public health and welfare, then the act gives it the power to regulate emissions. The EPA announced last December [JURIST report] that it had found that greenhouse gases “threaten the public health and welfare of current and future generations,” and that emissions from motor vehicles contribute to greenhouse gas pollution. The EPA first announced its proposed finding [JURIST report] in April before undertaking a 60-day public comment period. Some have suggested that the EPA findings have allowed Congress to avoid the political fallout [JURIST comment] that could come from passing tough climate legislation. AB 32 was first signed into law [JURIST report] by California governor Arnold Schwarzenegger in 2006.