Cap-and-trade success in California could extend program nationwideNovember 13, 2012
California could prove a successful testing ground for cap-and-trade system
Cap-and-trade has long been a controversial topic within the U.S. Though the country is keen to curb its carbon dioxide emissions, the connotations associated with a cap-and-trade system are not often well received by the general public or businesses. For many, the possible link between the government’s actions concerning emissions and the phenomenon of climate change are abrasive. Businesses have not been fans of a cap-and-trade system because of the high operational costs they could see. The country may soon have a nationwide system in place, however, if such a system proves successful in California first.
State finds mild success with emissions curbing program
California currently has a cap-and-trade program in place, which has been considered a net success. The state introduced the program in 2006, but it did not take full effect until last year. According to the program, California provides businesses with emissions credits every year. These credits account for the total emissions a single company can produce and release into the environment. The companies targeted in the program have been issued credits accounting for 90% of their recent emissions so as to mitigate certain legislative problems, but these companies are required to limit their emissions significantly moving forward.
US could adopt large scale cap-and-trade system based on the success of California
California is one of the world’s largest economies, even independent from the U.S. The state is popular for businesses from all over the world, largely due to the friendly policies and tax credits the state boasts of. For this reason, California is considered an ideal proving ground for a cap-and-trade system. If this system can find resounding success in the state, it is likely that this success will scale up to encompass the entire nation.
2016 may see new emissions tax system in place
If California shows that a cap-and-trade system can work, the U.S. has plans to institute a nationwide program beginning in 2016. Depending on the standards of this program, U.S. emissions could be significantly reduced in the future, helping the country reach its overarching sustainability and emissions goals.