California cap-and-trade program gains support of renowned economists
Earlier this week, California Governor Jerry Brown received letters from nearly 60 renowned economists from around the country. These economists have come out in support of the state’s ambitious cap-and-trade program, which aims to cut carbon dioxide emissions and promote environmentalism amongst the state’s largest companies. The California cap-and-trade program is part of the state’s Global Warming Solutions Act, a legislation that aims to mitigate or halt the effects of climate change. The support provided by economists is likely to add momentum to the California cap-and-trade program.
Program aims to limit carbon emissions
The letters arrived just days before the state is scheduled to launch a simulated auction of carbon credits. These credits will provide some companies with leeway regarding the amount of harmful emissions they can produce. Companies with more credits will be able to release more carbon emissions. The California cap-and-trade program will enable companies to trade their credits amongst each other, though these actions will be strictly regulated and monitored.
Auctions could have positive economic implications for California
Economists praised the initiative, noting that the real auction of carbon credits is likely to generate significant revenue for the government. The financial implications of the auction could be beneficial for California residents. Economists suggest that successful auctions could translate into reduced taxes as the state government would have a new source of revenue. The California cap-and-trade program may also help the state reach the environmental goals it has established for itself as many companies begin to make the transition to alternative energy.
Companies likely to adopt alternative energy to comply with emissions standards
The California cap-and-trade program is expected to give large companies an incentive to make use of alternative energy rather than fossil-fuels. Those unwilling to purchase or trade for carbon credits will face strict restrictions to the emissions they are able to produce. Those that do not comply with the state’s emissions standards will face steep fines and other consequences. Thus, these companies are likely to seek out other forms of energy that produce no carbon emissions.