The plan would hold California's worst polluters accountable for the heat-trapping emissions they produce - transforming how people travel, how utilities generate power and how businesses use electricity.
At the heart of the plan is the creation of a carbon-credit market designed to give the state's major polluters cheaper ways to cut the amount of their emissions. That market and the many other strategies referenced in the plan will be fleshed out and adopted over the next few years.
California's plan comes at a time when governments around the world are struggling with a financial crisis that threatens to undermine efforts to fight climate change. California itself is facing a forecast budget gap of $41.8 billion through June 2010.
Republican Gov. Arnold Schwarzenegger, who has said the state's climate law will stimulate the economy, said Thursday that California was providing a roadmap for the rest of the country. "Today is the day we help unleash the full force of California's innovation and technology for a healthier planet, a stronger and more robust economy and a safer and more secure energy future," Schwarzenegger said in a statement released after the board's vote.
His sentiments echo those of President-elect Barack Obama, who also has promoted investments in energy efficiency and green technology to help spur the country out of recession. Last month, Obama said he hoped Congress would adopt California's targets for the entire country, essentially reversing eight years of U.S. policy against mandated emission cuts.
California's 2006 law, called the Global Warming Solutions Act but commonly referred to as AB32, mandates the state cut emissions to 1990 levels by 2020.
The strategy chosen by air regulators relies on 31 new rules affecting all facets of life, from the fuels Californians put in their vehicles to the air conditioners businesses install in their buildings.
The average Californian, for example, could see more fuel-efficient cars at dealerships, better public transportation, housing near schools and businesses and utility rebates to equip their homes to be more energy efficient.
But there will also be costs.
California drivers will see more expensive cars on showroom floors and should expect to pay higher power bills as utilities increase their use of renewable energy.
Republicans, small businesses and major industries that will be forced to transform operations beginning in 2012 say jobs will be lost, companies might leave the state and energy prices will skyrocket. Many demanded the board perform more economic analysis before committing to policies they warned could worsen the economy.
"The deepening recession has affected businesses throughout the state," Amisha Patel, a policy advocate at the California Chamber of Commerce, told the board. "The reality of climate regulation is there will be costs."
The air board's background work has been criticized in reviews by California's nonpartisan legislative analyst and independent scientists, with both groups saying the costs to the state could be greater than projected.
Republican state lawmaker Roger Niello of Fair Oaks has asked the board to postpone its vote and complete a more thorough economic review.
An air board analysis published in September projected California's economy would grow at a faster rate by cutting emissions. It also estimated 100,000 more jobs would be created and the average California household would save $400 a year by driving more fuel-efficient vehicles and living in more energy-efficient homes.
Nichols said her board had done a thorough job of assessing the plan but vowed Thursday the board would conduct more studies as the regulations are developed over the next few years.
Most of the reductions in California's emissions will come from more detailed regulations that will be written over the next few years, including rules governing a cap-and-trade program that launches in 2012 to help the largest polluters achieve emission cuts.
But allowing businesses to buy their way out of the problem is another contentious part of the plan. Representatives of California's poor communities say the polluting power plants, refineries and factories in their neighborhoods could write a check rather than cut emissions.
On the Net: California Air Resources Board: www.arb.ca.gov