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AB 32: Global Warming Solutions Act of 2006 is the California legislation passed on August 31, 2006 and signed by signed by Gov. Arnold Schwarzenegger that establishes the US's first comprehensive regulatory and market mechanism designed to lower greenhouse gases. The legislation holds the California Air Resources Board (ARB) responsible for monitoring and reducing GHG emissions to 2000 levels by 2010 or 11% below business as usual, to 1990 levels by 2020 or 25% below business as usual, and 80% below 1990 levels by 2050. [1]

The plan includes about 85% of California's total greenhouse gas emissions and will reduce them through a declining emissions cap.[2] The legislation includes electric utilities, industrials, transportation, agriculture and forestry, small industrial firms, commercial and residential emissions.

AB32 will create a cap-and-trade market and link to the Western Climate Initiative, a group of seven western states and two Canadian provinces. The cap-and-trade market is scheduled to launch in 2012. [3]

The legislation also calls for an increase in the amount of renewable energy used by the state to 33 percent by 2020, up from a state mandated level of 20 percent.[4]

Timeline for AB32[edit]

Requires ARB to:

· Establish a statewide GHG emissions cap for 2020, based on 1990 emissions by January 1, 2008.

· Release a final plan by October 2008.

· Adopt a plan by January 1, 2009 indicating how emission reductions will be achieved from significant GHG sources via regulations, market mechanisms and other actions.

· Adopt regulations by January 1, 2011 to achieve the maximum technologically feasible and cost-effective reductions in GHGs, including provisions for using both market mechanisms and alternative compliance mechanisms.[5]