SACRAMENTO, Nov. 14 (UPI) -- California has conducted its first cap-and-trade auction of greenhouse gas pollution credits, despite a lawsuit filed by the state Chamber of Commerce.
Air Resources Board employees manned computer terminals Wednesday to accept bids in the 3-hour sale of so-called cap-and-trade credits from companies that emit carbon dioxide, methane and other gases that contribute to global warming, the Los Angeles Times reported.
Major industrial facilities such as cement plants, steel mills, refineries and food processors get 90 percent of their needed credits free but must buy more if they plan to release carbon dioxide and other greenhouse gases in excess of allotted levels, with auction prices starting at a minimum price of $10 for the right to emit one additional metric ton of greenhouse gases.
The program covers about 350 industrial businesses operating a total of 600 facilities throughout California. The auctions, to be held quarterly, are expected to generate about $1 billion for the state in their first year.
The Wednesday auction is the first held by any state in the nation, with supporters putting it forward as a model for an eventual national cap-and-trade system.
The California Chamber of Commerce sued the state Tuesday, challenging California's authority to raise revenues from sale of the credits.
The Air Resources Board, in going ahead with the auction, said it's "confident that the cap-and-trade program will withstand any court challenge."