Jim Waring, Cleantech San Diego

>> >>JOANNE: By forcing businesses in California to pay for the carbon emissions they produce, the state hopes to reduce green house gases in the long run, but in the short tim term the program is also expected to bring in about a billion dollars. Where will that money go. Joining me to help answer that company is Jim Waring, CEO and president oft clean tech San Diego explain the organization you represent. >> >>JIM WARING: Clean tech San Diego is a non profit trade organization. We were trying to development in our region, the business development behind clean technology and sustainability. >> >>JOANNE: When with y say cap and trade, and hear cap and trade y think what are they talking about. I try to explain a little bit in my introduction, but clarify what the program is. >> >>JIM WARING: I'll try and do it in a way that I understand it. The cap is the amount in this case the amount of CO2 that a covered business mayo mit. That's the cap. Think of that as the ceiling. The trade portion is that if you save some of that cap, if you have a surplus, and you may sell that in the market, you may trade it in the market, so the marketÊ the trade part is what businesses save from their allowances, and what the state of California has reserved to itself to sell into the market. >> >>JOANNE: So first of all, when you say covered business, you mean a business that has to follow the rules under this program? >> >>JIM WARING: And the state intentionally limited the program soo too what's called large emitters. Large y emitters limit 25,000 CO2 metric ton equivalency. The average family of four in their normal year emits 20 metric tons. Think 20 metric tons versus 25,000 metric tons. The program is intentionally designed to work on large things. >> >>JOANNE: Cap and trade names on the screen so people can see. Let's say you're a company and for whatever reason, you can't get to that cap. You're above that. I could go to the market place and pay for someone's credit, right? >> >>JIM WARING: That's correct. You buy the additional credit. Some people would say you buy the right to pollute. But what your really doing is buying tons of CO2 emissions allowances, that's correct. >> >>JOANNE: So from a really wealthy profitable company, doesn't it just mean I could buy my way out f this. >> >>JIM WARING: First of all, the economic incentiveÊ as a company, or an organization, you're not going to inter a cost just because it's easier. You're going to try to not have to buy those credits. Because it's in your economic desire to do so. The leadership of these organizations will do what they can do intermy to reduce their total carbon emissions, because the goal is to lower your emissions. The way the program is designed each year between 2013 and 2020 the amount of allowance that an organization has goes down. So the pressure will increase to become more efficient. >> >>JOANNE: So there is going to be this trading now in the market place. I mentioned the state could end up netting some money out of this. How does that work? >> >>JIM WARING: The state, to basically balance the marketÊ the state is issuing the credits, remember. So the state is retaining to itself as it should a certain number of allowances to sell. So the state will sell those, into the market place, and therefore the state will get the money, and the proceeds. >> >>JOANNE: About a billion dollars, that's what experts are saying. Where does that money go? >> >>JIM WARING: There's a big debate about that, obviously. The cynics will say that the state's using this as a way just to raise money to spend, but I will say that it will often be a political decision, made by the legislature with the governor. The discussions to date have been to spend the money on energy related programs. Remember, cap and trade is part of our AB32 protocol. I'm seeing, and most of the people I'm talking to are seeing, is the discussion of how to spend it within the goals of AB32, which is to reduce our state's carbon foots print to 1990 levels by 2020. Hopefully the political petitioners won't have that money be diverted. >> >>JOANNE: This has been a great explanation. I want to send people to KPBS.org, because earlier you spoke with Maurine Cavanaugh, and there's so much more on the website about this. Thanks, Jim.