Cap and trade: Emissions reductions at low cost

The California Air Resources Board (CARB) has an approved blueprint for reducing the state's greenhouse gas (GHG) emissions to 1990 levels by 2020, or 25% below the business-as-usual level, the goal set out in Assembly Bill 32.

The Scoping Plan contains the main strategies for California to cut climate change pollutants, including direct regulations, incentives, voluntary actions and market-based mechanisms such as a cap-and-trade system.

EDF considers cap and trade the cornerstone of California's long-range effort to spur innovation, attract investment, grow jobs and reduce harmful emissions at the lowest possible cost.

Next steps in cap-and-trade program

CARB is working with stakeholders to design a cap-and-trade program that is enforceable and meets AB 32 requirements, including the need to prevent adverse impacts on communities historically burdened by pollution and to avoid relocation of jobs to states with less stringent climate laws.

In November 2009, CARB released a preliminary draft version of California's cap-and-trade regulation. The agency finalized the program in 2010 and adopted it in December 2010. While originally scheduled to start on January 1, 2012, CARB changed the compliance date to January 1, 2013 while keeping the targets intact.

EDF is working with CARB on the draft regulations to ensure the program is well-designed and will achieve its goals at the lowest possible cost and with the greatest economic and environmental benefits.

Our policy analysts, legal experts and economists provided recommendations on a range of subjects, including program scope, carbon accounting, offsets, cost containment, community benefits and enforcement. We are continuing to work with CARB to provide science-based expertise that supports due diligence and the rule-making process.

Regional cap-and-trade program ensures reductions at low costs

California is collaborating with six western states and four Canadian provinces through the Western Climate Initiative (WCI) to design a regional cap-and-trade program that delivers regional reductions at costs lower than could be realized through a California-only program.

California's cap-and-trade program is scheduled to start in January 2013. In 2012, CARB is expected to link California’s market with Quebec’s recently approved cap-and-trade program. EDF is working to support the successful design and implementation of programs that can be effectively linked to achieve maximum environmental and economic benefits.