The A-R-B voted nine to one to approve the measure after a day of testimony from nearly 200 witnesses. Before the vote, A-R-B Chair Mary Nichols reminded everyone about the program's significance.
"We know that it is a historic venture and we know that we will not have gotten everything right."
So here's how it works. Cap-and-trade limits how much carbon dioxide a company can emit. If the limit is exceeded, carbon credits can be bought from the state or other companies or even other countries who are taking part in the program. The goal is to get California back to 1990 carbon dioxide levels in the next decade.
But many at the hearing have reservations about the whole idea. Among them is Jeff Conant with the Global Justice Ecology Project. He calls cap and trade a "license to continue polluting."
"I'm generally opposed to market based climate solutions because when you place an economic value on something you create an incentive to actually create more of it so putting an economic value on CO2 will actually create more CO2 emissions not less."
Another concern was that cap and trade will reward deforestation. Shasta County logger Randy Compton says logging companies will double dip. They'll profit from cutting the trees down, and get carbon credits for replanting them. He says from the ground, it's hard to see just how much of the forest has been cut down.
"You can look at Google earth and make up your own mind who's telling the truth because they're eradicating the forest but they're wanting to get paid for it too."
The vote to approve cap and trade was a big victory for California Governor Arnold Schwarzenegger, who also testified. He's been a long time supporter of the initiative to lower carbon emissions. He says the program will be an economic and environmental boost for the state and limit dependence on foreign oil.
"I despise the fact that we send 1 billion dollars a year to foreign places for our oil, and to places that hate us. We send this money to people that hate us."