California Global Warming Solutions Act of 2006: allowances.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The state board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020, and to adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions. The state board is authorized to adopt market-based compliance mechanisms, as defined, meeting specified requirements to be used for compliance with those regulations. The state board is required, before including any market-based compliance mechanism, to maximize additional environmental and economic benefits for California, as appropriate. This bill would require the state board, if market-based compliance mechanisms are adopted that include the distribution of allowances, which are defined under existing law as authorizations to emit greenhouse gas emissions, to sell or otherwise distribute an allowance only to a regulated entity, as defined, subject to the greenhouse gas emissions limit to which that allowance applies. The bill would authorize a regulated entity to sell or trade an allowance only to another regulated entity.