California published a radical climate change plan this week, outlining its intention to have its wide-ranging policy proposals formally approved by the end of the year and up and running by 2012.

Under the personal stewardship of Governor Schwarzenegger, the state has consulted 42,000 members of the public on the so-called AB32 scoping plan.

This sets out the policy measures required to ensure the state meets its high-profile 2006 commitment to reduce emissions to 1990 levels by 2020.

The scoping plan – which was overseen by the California Air Resources Board - proposes a target to ensure a third of the state's energy mix comes from renewable sources, the introduction of a cap-and-trade scheme modelled on the EU emissions trading scheme, tighter regulations on water use and fuel standards, and a fee on citizens to fund the administrative costs of moving to a low carbon economy.

It also sets out proposals for tighter regulation of emissions from shipping, changes to agricultural and forestry practices to improve sustainable land use, expanded recycling schemes, and town planning moves to decrease urban sprawl and improve public transport links.

The proposals have faced staunch opposition from some industries and business groups, but Californian officials are keen to highlight that the plan will benefit the economy in the long run.

The report argues that "in the light of current economic uncertainty, it is important to ensure California's climate policies be designed to promote and take advantage of economic opportunities".

To this end, the plan includes the introduction of feed-in tariffs for home and community renewable generation technologies, as well as further tax breaks for small cleantech businesses.

By 2020 the plan envisages an increased economic production of $33bn (£19bn) above business-as-usual levels, with over 100,000 jobs being created as global demand for cleantech products rises.

The plan also reiterates California's support for the Western Climate Initiative (WCI) regional emissions trading scheme, which includes six other western US states and four Canadian provinces.

It is hoped that by teaming up with neighbouring states, the scheme will help avoid so-called "carbon leakage", whereby the carbon intensive industries covered by the scheme simply relocate to states where there are no carbon caps.

A report by the American Council for Capital Formation has warned that the plan will cause some pain to California's economy in the short term.

But Audrey Chang, climate change director at the National Resources Defense Council, said growing global demand for cleantech products meant the state would benefit from the legislation in the long run.

"Not only will energy efficiency and clean renewable energy protect our planet and the health and safety of billions of people – not to mention ecosystems and wildlife – they will launch new jobs, businesses and prosperity here at home in California and around the world," she said.

Derek Walker, director of the California Climate Initiative at the Environmental Defense Fund, also praised the plan, claiming that it recognised the importance of retraining the workforce to give employees skills suited to a low carbon economy.

"The final AB32 scoping plan recognises that training workers and connecting them to available positions will be key to creating a thriving green economy," he said.

The plan is also expected to secure widespread popular support. A recent poll commissioned by Fairbanks, Maslin, Maullin & Associates showed nearly three out of four of Californian voters supported state energy policies to tackle global warming and reduce pollution.