California approved one of the broadest and most controversial components of its landmark climate change law, pushing the state toward a low-carbon economy that relies less on imported foreign oil.

The California Air Resources Board on Thursday voted to adopt final rules that will regulate carbon emissions across a broad cross section of the state's economy, including oil and gas producers, utilities and transportation companies, farmers and the building industry.

"We will look back at this as an important date in California's transition to a clean energy economy," said Mary Nichols, the air board's chairwoman.

Dubbed the economic equivalent of "a moonshot" by its backers and a "job killer" by detractors, the "cap and trade" system adopted Thursday sets limits on the amount of carbon dioxide that can be produced by 350 of the state's largest industrial polluters starting in January 2013.

The state will issue a set number of "carbon allowances." Companies that pollute less than their limit can sell their unused allowances to companies that pollute heavily, creating market incentives to reduce emissions.

The program will create the nation's largest market for trading pollution allowances. Congress in 2009 rejected legislation that would have created a federal cap and trade system.

In California, 90 percent of the allowances will be given out free, but 10 percent will be sold on the open market, which some say could raise $500 million a year for the state's climate-change programs.

Proponents say cap and trade will not only reduce greenhouse gases but will spur innovation in the clean-technology sector.

Fred Krupp, president of the Environmental Defense Fund, said the vote is a historic event and shows that California can move in a big way toward cutting carbon pollution.

As the world's eighth largest economy, much of California's future growth will emerge from development of clean technologies, he said.

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