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Back You are here: Home Business Carbon Market New emissions trading scheme kicks off in California

Carbon Market

New emissions trading scheme kicks off in California

California has implemented a new cap and trade scheme aimed at reducing greenhouse gas emissions of the United States’ most populous state.

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Companies whose activities release 25,000 metric tons of carbon emissions annually are expected to comply with the new cap and trade program.

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For 2013, the scheme has come in effect for companies involved in the electrical industry and energy intensive manufacturing companies. Other sectors, such as transportation fuels and natural gas use by residential and commercial sectors will have to comply in 2015.

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The state-wide limit on emissions has been set at 162.8 million metric tons of carbon dioxide. Currently, around 350 companies in the state will come under this scheme and will be required to either cap their emissions or earn allowances for the carbon dioxide emissions they emit.

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These allowances are tradable and each allowance permit the holder to emit one metric ton of carbon dioxide equivalents, according to California’s Air Resources Board, the enforcing body of the new scheme.

Failure to meet emissions limit, submit compliance instruments and any forms of violation of the cap and trade scheme will be subjected to penalties.

Conceived by former governor Arnold Schwarzenegger in 2006, the emissions trading scheme will help California achieve its target to cut carbon emissions to 1990 levels by the end of the decade, while encouraging investments in clean technologies and generating jobs in the sector.

The California cap and trade scheme was intended to be followed by other states. It is anticipated that when the system turns out successful, it could be emulated across the U.S.

Other countries across the world that already set up a nationwide emissions trading scheme are China, Australia, New Zealand, South Korea, Thailand and Vietnam. Meanwhile, the European Union is the first and so far, the largest international system for trading carbon emissions allowances, covering 27 member countries. – EcoSeed Staff

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