California Cap-and-Trade Preparations Resume, Clean Vehicle Rebates Running Out Because of Strong Demand

Good news for California’s cap-and-trade plan…

A state appellate court ruled on Friday that state regulators can continue preparations to launch the program in 2012.

In May, a Superior Court judge halted progress on the program, saying the Air Resources Board had failed to properly consider other strategies for reducing greenhouse gas emissions as required by state law. 

The state is challenging that ruling, but since it could take up to a year for a decision, the state would miss its 2012 launch date. 

But Friday’s ruling gave regulators permission to continue work on the carbon market, which is planned to cover about 20% of the state’s overall emissions. 

Cara Horowitz, an attorney with the UCLA Emmett Center on Climate Change and the Environment, told Reuters the ruling is a positive step, but that it is "by no means certain" the state will meet its target launch date. 

In addition to overcoming legal challenges, regulators still have much work to do in determining how carbon permits will be allocated and auctioned.

Running Out of Funds for Clean Vehicles

The Air Resources Board says rebates for residents who purchase zero-emissions vehicles may run out by the end of July.

High demand for the Clean Vehicle Rebates is quickly eating through the $11.1 million allocated for the program for fiscal years 2009-2011. 

The rebates of up to $5,000 per vehicle have made California the hottest market for electric and plug-in hybrid vehicles like the Chevy Volt and Nissan Leaf.

New funding may be approved at the end of July pending the state’s budget situation. The Air Resources Board proposes raising funding levels to $12 million – $17 million for the next fiscal year – but would cut the rebate amount in half to $2,500. 

Becuase there’s such strong demand, regulators are betting that reducing the rebate wouldn’t dampen enthusiasm for the new vehicles.

Only 9% of the original funding remains right now. If it runs out, new vehicle owners would go on a waiting list to receive their rebates.

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