In partnership with UNEP

California begins groundbreaking carbon trading scheme in bid to reduce emissions

10 January 2013 | William Brittlebank | Carbon management, Energy, Policy & Legislation, Europe

 Rich Niewiroski Jr.

The first legally-binding emissions cap-and-trade scheme was implemented in California, USA this week and there is hope among campaigners that the state could lead the way in providing an example that  the rest of the country can follow in the struggle to reduce carbon emissions.

The climate change and clean energy law that provides the legal framework for the scheme was initially conceived by former governor Arnold Schwarzenegger during his tenure  in 2006 and the scheme is now a cornerstone in California's plans to reduce greenhouse gas emissions to 1990 levels by the end of the decade, while encouraging investment in clean technologies and creating jobs in the sector.

The scheme officially began on January 1 and established a state-wide limit on emissions of 162.8 million metric tons of carbon dioxide. The scheme has imposed emission allowances on around 350 companies that are generating more than 25,000 metric tons of carbon dioxide a year. Each of the companies covered by the scheme will be required to carry allowances for the right to pollute under the cap.

Schwarzenegger has explained that the cap-and-trade system was designed with the intention of being replicated by other states and there is expectation that if the scheme is successful it could be emulated across the country.

The scheme has been compared to the European Union's emissions trading scheme, which began its latest phase at the start of 2013.

Quebec also kicked off a cap-and-trade scheme on January 1, as part of the Canadian provinces emissions recustion plans, and further emissions trading schemes are planned in China, South Korea and Australia in the coming years.

California and Quebec are members of the Western Climate Initiative (WCI). The Initiative comprises seven US states and four Canadian provinces and plans to develop a common emissions reduction scheme that can be adopted by the continent's western states.

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