Emissions trading takes center stage in California
In California, Gov. Arnold Schwarzenegger and Democrats in the legislature are at an impasse over several aspects of a bill to limit state's contribution to global warming - which, believe it or not, represents 12% of the world's total greenhouse gases. [Los Angeles Times] At the heart of the debate is Schwarzenegger's proposal to create a cap-and-trade emissions market.
In a cap-and-trade emissions market, a government regulatory agency sets emissions standards and grants polluters a certain number of emissions credits, with the overall emissions level dropping over time. If a company surpasses the mandated emissions level, it can buy additional emissions credits, and if it is below that level, it can sell their emissions credits to other companies on the market. The goal of a cap-and-trade system is to create a market-based financial incentive for companies to limit their emissions, and the approach has produced results in the EPA's acid rain reduction program and in several European programs. A number of major industrial polluters have already voluntarily joined the Chicago Climate Exchange, a private exchange which many see as a model for an eventual federal carbon emissions trading program. [Fortune]
Among the criticisms of the current California bill are that it would be difficult for a single state to successfully monitor a cap-and-trade program without other states participating, and that there is no assurance that the companies would even be allowed to participate in such a program without violating applicable federal laws. [CBS News] As a result, some environmentalists fear that passing the cap-and-trade bill will not accomplish anything, and that traditional emissions standards are a safer approach for the state. Some local environmental groups in heavily polluted areas are opposed to cap-and-trade systems completely, because they may not result in lower local emissions, even if they can help decrease the state's overall emissions. [CBS News] Finally, business groups have objected on the argument that the bill would force business out of the state.
"Emission Bill Sets of Clash in Sacramento" [Los Angeles Times]
"Global Warming Bill Stalls in California" [CBS News]
"For sale: Pollution" [Fortune]
UPDATED 9/1/06:
Good news! The cap-and-trade emissions bill passed yesterday. Whether one state can effectively run a cap-and-trade system remains to be seen, but creating a market mechanism to fight global warming is a brilliant idea, and Gov. Schwarzenegger and the California legislature deserve credit for forging a compromise and pushing forward in this area.
"California takes on global warming" [CNN]
In a cap-and-trade emissions market, a government regulatory agency sets emissions standards and grants polluters a certain number of emissions credits, with the overall emissions level dropping over time. If a company surpasses the mandated emissions level, it can buy additional emissions credits, and if it is below that level, it can sell their emissions credits to other companies on the market. The goal of a cap-and-trade system is to create a market-based financial incentive for companies to limit their emissions, and the approach has produced results in the EPA's acid rain reduction program and in several European programs. A number of major industrial polluters have already voluntarily joined the Chicago Climate Exchange, a private exchange which many see as a model for an eventual federal carbon emissions trading program. [Fortune]
Among the criticisms of the current California bill are that it would be difficult for a single state to successfully monitor a cap-and-trade program without other states participating, and that there is no assurance that the companies would even be allowed to participate in such a program without violating applicable federal laws. [CBS News] As a result, some environmentalists fear that passing the cap-and-trade bill will not accomplish anything, and that traditional emissions standards are a safer approach for the state. Some local environmental groups in heavily polluted areas are opposed to cap-and-trade systems completely, because they may not result in lower local emissions, even if they can help decrease the state's overall emissions. [CBS News] Finally, business groups have objected on the argument that the bill would force business out of the state.
"Emission Bill Sets of Clash in Sacramento" [Los Angeles Times]
"Global Warming Bill Stalls in California" [CBS News]
"For sale: Pollution" [Fortune]
UPDATED 9/1/06:
Good news! The cap-and-trade emissions bill passed yesterday. Whether one state can effectively run a cap-and-trade system remains to be seen, but creating a market mechanism to fight global warming is a brilliant idea, and Gov. Schwarzenegger and the California legislature deserve credit for forging a compromise and pushing forward in this area.
"California takes on global warming" [CNN]
posted at 9:42:00 PM | permalink
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