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California Continues to Cut Emissions as it Extends its Cap-and-Trade Program

Matt Z. QC, Canada 0 Ratings 7 Discussions 32 Group posts

Posted by: Matt Z. // Student

California has had a cap-and-trade system up and running since 2013, and now Gov. Jerry Brown wants to extend the program to 2030. The initial program, which was meant to run until 2020, has been successfully lowering greenhouse gas emissions and cutting pollution. Additionally, if the new bill is passed, all of the carbon allowances available between now and 2020 will sell out, and Energy Innovation predicts that this will generate $1.3 billion in additional revenue for the state’s Greenhouse Gas Reduction Fund (GGRF). This fund takes the money generated from the cap-and-trade system and invests it in clean energy and other emission-reducing projects. The program extension to 2030 is then supposed to generate another $26 billion in revenue for the GGRF. Furthermore, it would gradually lower the “caps” on emissions over time and steadily increase the price of carbon allowances to fund the future of clean energy in California.

There are, however, critiques of extending the program until 2030. Some people have pointed out, among other things, that the new bill maintains existing levels of free allowances for oil refineries. So basically, could the new bill have cracked down more on carbon emissions and imposed even more stringent regulations?

Well, according to Chris Busch of Forbes magazine, the oil lobby has lost more policy battles than it has won and comprising over these kinds of matters is key. With a pressing issue such as climate change, any ideal policy should cut greenhouse gas emissions as much as possible. But in a world that was so recently (and still is) heavily dependent on fossil fuels, any transition is going to take time. Extending the cap-and-trade program to 2030 does impose further restrictions on emissions and is an overall positive change towards reducing our carbon footprint. Even though the policies could have potentially been stricter, this new bill should be seen as a win and not a loss, because at least a successful cap-and-trade system is being carried out in the first place.

What do you think of California’s cap-and-trade program extension?
Is there a better alternative?

For more information on carbon pricing in general or a what cap-and-trade system entails: http://www.rateitgreen.com/articles/carbon-pricing-transitioning-from-fossil-fuels-to-renewables/76

References: https://www.forbes.com/sites/energyinnovation/2017/07/12/californias-cap-and-trade-compromise-is-a-big-step-forward-not-a-win-for-polluters/2/#ae879744fda1

Keywords: Carbon Pricing
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