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Polluters won't pay yet: Air Resources Board will wait to decide on carbon fee

June 25, 2009 |  8:15 pm

Californians will have to wait until next month to see whether the state will approve the nation's first statewide carbon fee. In a meeting Thursday, the California Air Resources Board determined that more time was needed to iron out the details of the new regulations, which would be used to generate revenue for AB 32, California's groundbreaking climate legislation.

Under the new regulations, the state's biggest greenhouse gas polluters would pay a fee toward funding the estimated $36.2 million annual administrative cost of implementing the California Global Warming Solutions Act of 2006 or AB 32. Revenue generated by the fee would also be used to repay money that the EPA and ARB borrowed to implement the legislation over the last few years.

About 250 major polluters that contribute 85% of the state's greenhouse gases would bear the brunt of the financial burden under the new regulations. The cost to polluters would range from tens of thousands to hundreds of thousands of dollars a year depending on carbon output, according to the ARB's Stanley Young. 

The industries affected by the new regulations include large natural gas distributors and users, refineries, plants that burn coal, producers and importers of gas and diesel, cement manufacturers, and importers of out-of-state electricity, the ARB said. The board estimates that the added cost to consumers would be about $4 a year in increased fuel and utility costs for an average household, and less than a penny per tank of gasoline.

Industry representatives and health and environmental advocates argued their case before the board on Thursday. The Sierra Club, Natural Resources Defense Council, American Lung Assn. and Planning and Conservation League announced their support for the bill. Industry representatives expressed concern over the issue of electricity that passes through but is not used in California. Citing that and other concerns, Chairman Mary D. Nichols moved to delay a decision until the board's next meeting in San Diego on July 23.

Opponents of the measure have also complained about a perceived lack of transparency from the Air Resources Board. An alliance of 16 taxpayer and commercial associations has filed a lawsuit against the ARB, alleging that the board has not heeded their request to produce records related to spending. Last week, the board released a document containing more than 5,000 pages. At Thursday's meeting, a representative said the groups had not had sufficient time to read the documents.

"We haven't even adopted the regulation, and we're already being sued," Nichols said.

--Amy Littlefield