California, a leader in efforts to combat climate change, has become the first US state to implement cap-and-trade to regulate greenhouse gas emissions.
The system will place a price tag on carbon emissions and allow the state’s industries to trade carbon credits. The system will provide financial incentives to companies in order to curb greenhouse-gas emissions.
Scheduled to start in 2013, the cap-and-trade program aims to slash emissions to 1990 levels by 2020.
The first part of the plan will include a cap on emissions, allowing businesses to sell their excesses to companies exceeding their carbon allowances. Companies included in the plan will have to pay 10 percent of their initial credits, but able to purchase carbon offsets in order to comply with the eight percent of annual emission obligations.
The plan should drive a a surge of investment in clean energy technology. The system will also force companies to innovate in order to stay competitive.
This is great news for the renewable energy sector. According to research group Next 10′s latest edition of the Many Shades of Green report, green job growth in California outpaces the overall economy by three times the rate of overall job growth. The new regulations are sure to add to the “core green economy” in California.
© 2011, Richard Matthews. All rights reserved.