In the final days of this year's session, the California State Legislature approved landmark legislation (A.B. 32) that would cap emissions of greenhouse gases from sources within the state to 1990 levels by 2020. Specifically, A.B. 32 would require the board to adopt regulations by Jan. 1, 2008 that mandated major sources of greenhouse gases to monitor and report their emissions. By 2011, the board would establish emissions caps that would go into effect in 2012. Prior to 2011, the board will have the authority to propose a list of "early action greenhouse gas emission reduction measures" that could take effect prior to 2010.

While the legislation will have a major impact on power plants and other heavy energy users, the vehicle retail aftermarket could also feel the sting. One of the provisions under consideration by the board for early implementation would prohibit the retail sale of R-134a, thus ending the do-it-yourselfer air conditioning market in California. Such a proposal was considered by the U.S. Environmental Protection Agency (EPA) in the late 1990s, but was rejected.

California Governor Arnold Schwarzenegger spent most of August negotiating with Democratic leaders in the state legislature on the need to limit the rule-making authority of the California Air Resources Board (CARB) in developing the greenhouse gas regulations and on the need to create a market-based emissions trading program. However, in the end, the governor was only able to obtain a safety valve that would permit him to suspend the greenhouse emissions caps for up to one year if necessary to stabilize the economy; and the ability to develop a market-based emissions trading program. Nevertheless, the governor announced not long after passage by the state legislature that he intends to sign the legislation.