The Sierra Club warned that new regulations establishing a carbon trading regime include a giveaway to certain industries, pointing to allowances for emissions that were awarded at no cost rather than auctioned, as a state advisory committee had recommended. The plan also allows companies to purchase credits to avoid reducing pollution at their own facilities. Among the sellers of such credits will be timber companies that pledge to increase the carbon storage in forests, possibly by clear-cutting and planting new trees.
Sierra Club lobbyist Bill Magavern says oil companies would be the biggest beneficiary of the free allowance system. "The state will be giving oil companies valuable commodities for free, setting them up for windfall profits," he said.
But other groups, including the Nature Conservancy and the Environmental Defense Fund, said the tradeoffs are a small price to pay for launching a cap-and-trade system at a time when national legislation on the issue is stalled.
"He's been a real-world action hero on the most important issue of our generation," Fred Krupp, president of the national Environmental Defense Fund, said of the governor.