The United States’ first legally-binding emissions cap-and-trade scheme kicked off in California on Tuesday, with campaigners hoping the state could provide a model the rest of the country could follow as it attempts to tackle carbon emissions.
The scheme officially came into effect on January 1, establishing a state-wide limit on total emissions of 162.8 million metric tons of carbon dioxide and imposing emission allowances on around 350 companies generating more than 25,000 metric tons of carbon dioxide a year. Each of the companies covered by the scheme must carry allowances for the right to pollute under the cap, the first of which are due to be handed over to authorities in November 2014.
The bulk of the allowances will be handed to companies for free, but some allowances will be auctioned and any firm exceeding its emissions cap will have to purchase additional allowances to cover the excess.
The AB-32 climate change and clean energy law that provides the legal underpinning for the scheme was first conceived by former governor Arnold Schwarzenegger in 2006. The scheme is central to 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 green jobs.
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