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California cap and trade program: How it works

4,058 views · Published 17 December 2012 · 0:51 · Indexed 23 October 2026

Channel: News Direct · 2012 · News & Politics

California began auctioning permits on Wednesday for its new cap-and-trade program aimed at reducing emissions of greenhouse gasses.
The cap-and-trade program is part of California's Assembly Bill 32, a 2006 law that aims to cut emissions to 1990 levels by 2020.
The cap-and-trade program goes into effect in 2013 and imposes a limit on emissions by individual companies. The limit will be reduced by 2 percent to 3 percent each year until 2020.
Under the program, companies must obtain an allowance for each ton of carbon or other greenhouse emissions they produce. For the first two years of the program, 90 percent of allowances for emission under the cap are free. The other 10 percent are auctioned off for money. By 2020, 50 percent of allowances will be free, and the other 50 percent will be auctioned off for money.
Companies that pollute above the limit must purchase additional allowances. Companies that reduce their emissions below the limit may sell their allowances to companies that require additional allowances.

California cap and trade program: How it works

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