‘(Reuters) – California unveiled on Friday its final blueprint of a market system to curb greenhouse gases, relaxing expected rules in the face of a weak economy in a measure that could set the tone for the nation’s climate policy.’

Perhaps pressure from Prop 23, which threatens AB32’s implementation, is driving the decision to give away the emission permits rather than auction them:

‘The state will give away 100 percent of permits through 2020 to oil drilling, cement and other industries that otherwise might shut down if forced to pay for permits. Sawmills, food manufacturing and others will get shorter-term aid. Within an industry, more efficient firms will get more allowances, which less efficient companies may need to buy.’

via California unveils greenhouse gas trading plan | Reuters.