The California Air Resources Board unanimously adopted the nation's first state-administered cap-and-trade regulations Thursday, the Los Angeles Times reported.
The cap-and-trade system sets a price on heat-trapping greenhouse gas pollution to allow California's dirtiest industries to trade carbon credits, the newspaper said.
Beginning in 2013 the state's largest carbon emitters will be required to meet the state's carbon reduction targets or buy credits if they cannot.
At a meeting of the air board in Sacramento a parade of industry representatives called the system anti-business while others called it historic and groundbreaking.
"We've done something important," Chairwoman Mary Nichols said after board's unanimous vote to approve the program.
"Cap-and-trade is a new tool that for the first time allows us to reward companies for doing the right thing," she said.