California publishes cap-and-trade system proposal

In California, the state government published its proposed carbon and greenhouse gas regulations, but unexpectedly proposed to initially offer carbon emission permits by grandfathering in existing emissions as of 2012, when the emissions trading scheme takes effect.

The scheme, which is threatened by Proposition 23 on the California ballot in today’s election, is not expected to be rolled back by voters, and gradually tightens greenhouse gas emissions, hoping to unleash market forces in the trading of emission permits in its cap-and-trade system.

The plan is expected to reduce the economic growth rate by 0.1 percent annually.

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