California's cap-and-trade emissions program

California has adopted the most aggressive cap-and-trade scheme in the United States. Called the California Global Warming Solutions Act (AB32), the policy aims to lower emissions to 1990 levels by 2020. In this program, each has an annual emissions cap. In order to emit one metric ton of CO2 (or the equivalent of another greenhouse gas), each entity is required to have an emissions allowance or else they are dealt a fine. These allowances can be issued by the government, bought at auction, or traded amongst entities. This policy attempts to regulate pollution by providing economic incentives for reducing emissions. However, recent senate activity has sought to delay the cap-and-trade regulations in exchange for gasoline and other transportation taxes.

California’s attempts to strengthen emission regulations are a positive step forward. Using economic pressure by cap-and-trade to enforce environmental change seems like an effective method to inhibit emissions. However, I am disappointed that the state senate has suggested delaying the cap-and-trade measures and increasing gas and transportation costs as a stopgap. Recent research suggests that higher transportation costs affect the poor much more than other groups. In a time when income inequality is greater than ever, this hardly seems like an acceptable compromise. It is frustrating to see corporations getting preferential treatment over lower-income households.