Despite Congress' failure this year to pass a climate law, California regulators have approved the nation's largest system of financial incentives to get the owners of power plants, refineries and other major polluters to reduce their greenhouse gas emissions.

The state's Air Resources Board voted overwhelmingly, 9-1, late Thursday to pass the key piece of California's pioneering 2006 climate law, which had a Jan. 1, 2011, deadline for enacting the so-called cap-and-trade system. In November, Californians defeated a ballot proposition to suspend the law.

"We're inventing this," Mary Nichols, chairwoman of the state's air quality board, told the Associated Press. "There is still going to be quite a bit of action needed before it becomes operational." She said California is trying to "fill the vacuum created by the failure of Congress to pass any kind of climate or energy legislation for many years now."

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Officials told AP that they hope other states will follow California, which has the world's eighth-largest economy and already the nation's strictest climate-related rules for renewable energy and car fuel-efficiency. They're discussing ways to link their system with similar ones being planned or already operational in Canada, Europe and Asia.

Outside the board's chambers, a few climate change skeptics held signs reading "Global Warming: Science by Homer Simpson," reports AP. Some affected businesses say the system could increase the price of electricity and hurt the California's already weak economy.

GOP Gov. Arnold Schwarzenegger, who has championed the law, known as AB32, told the board that there's an economic upside. "The real jobs we're creating right now are green jobs," he said. "Since 2006 or so green jobs have been created 10 times faster than in any other sector, so it's also an economic plus."

He said reducing greenhouse gas pollution also helps human health and national security. "I despise the fact that we send $1 billion a year to foreign places for our oil and to places that hate us."

AP describes how the new cap and trade system will work: