California Cap-and-Trade Goes International

The Green Mien

California’s cap-and-trade program, known as “AB32,” is moving closer to its first binding auction. Mandated as part of California’s Global Warming Solutions Act of 2006, it requires greenhouse gas emissions in California to be reduced to 1990 levels by 2020 and to 80 percent of 1990 levels by 2050.

Recently, the state modified its greenhouse gas / carbon trading market to expand the reach of the program, proposing a formal link between the AB32 cap-and-trade system and a similar program in Quebec. The link, they expect, will expand participants’ trading options and increase liquidity in carbon markets. K&L Gates has a brief analysis of the linked system here.

The programs are similar in many ways. California’s program will at first cover 360 businesses responsible for 85% of the state’s greenhouse gas emissions. In 2013, the regulations will apply to industrial polluters, and in 2015 to distributors of transportation fuels…

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