This coming Wednesday, California is going to go one step further in their fight against climate change. The state is hosting the first ever sale of carbon emissions permits, which hopefully will become a common practice in many other U.S states.
The program is called “cap-and-trade”. The state sets limits (or cap) on quantities of greenhouse gases released by gas emitting businesses such as manufacturers and refineries. If these companies cannot reduce their emissions, then they will have to purchase carbon permits from companies that have “excess” (“trade”). In addition, the number of there permits will decline over time.
This practice is already applied in 30 European countries since 2005, and it is in a process of implementation in Australia, China, Japan, Kazakhstan, New Zealand, Quebec and South Korea.
“Cap-and-trade” program is expected to bring at least $1 billion a year, although past efforts have not been as successful and many are still convinced it will increase energy costs. .
Fred Krupp, president of the Environmental Defense Fund, is certain that this program is not only essential in the fight against climate change but it will also contribute towards improving public health. It will initially cover 350 businesses, and it will contribute towards the cutting down of greenhouse gas emissions.
Considering that the state of California is responsible for about 3% of the global greenhouse gas emission, the main goal of the program is to serve as an example to others. According to Mary Nicholas, chairwoman of the California Air Resources Board, although the initial impact will be relatively small, by implementing it the state will be able to demonstrate how this system could work.
The program comes in a very favorable political time. With the re-election of President Obama, it is ensured that the federal government will not be involved, and therefore a legislation creating a carbon tax might well be introduced.
It is expected that many such program will have many opponents especially in the face of states oil refineries, and it is likely that more join as the initiative expands to include distributors of transportation and home heating fuels in 2015.
Richard McNeil, an attorney with Snell & Wilmer representing California electric utilities, clarifies that the real benefits of such program will be seen a lot later, and expects legal challenges that will emerge in the future.
Nevertheless, it is a huge step and a result from a very long-term effort.
Via: Reuters
