Cap And Trade: California's Polluters Cleaning Up?

California's cap-and-trade program is one of the world's first and largest multi-sectoral emissions trading systems. It is a key element of California's strategy to reduce greenhouse gas emissions and achieve carbon neutrality. The program sets a cap on carbon emissions, creates a market for tradable emissions credits, and funds decarbonization projects. While California's program has helped it meet initial benchmarks, there are concerns about its effectiveness in reducing emissions and improving air quality for disadvantaged communities. Some studies show that carbon emissions from California's oil and gas industry have increased since the program's implementation, and environmental justice advocates criticize its failure to improve the lives of low-income people of color living near polluting facilities. However, other studies suggest a decrease in statewide greenhouse gas emissions, and the program has generated significant revenue for investment in emission-reducing projects. California is currently reevaluating the program and considering changes to address these concerns.

California's cap-and-trade program is one of the world's largest

The program works by setting a cap, or limit, on carbon dioxide emissions from major polluters. The emissions under that cap are turned into permits, which each give the owner permission to release one metric ton of carbon dioxide. Some permits are given out for free, while others are sold during auctions. If a company wants to emit more greenhouse gases than they are allotted, they must buy allowance credits from the state. This market-based approach has gained such traction that the Paris climate agreement emphasizes it as the primary way countries can meet their goals to lower worldwide emissions.

California's program has been successful in reducing greenhouse gas emissions. The state met its goal of reducing emissions to 1990 levels by 2020 and has generated $5 billion in total revenue since its commencement. The program has also funded $28 billion in climate investments, delivering more than half a million projects across the state, supporting 30,000 jobs, and cutting millions of tons of carbon emissions. However, critics argue that the program has failed to improve the lives of low-income people of color living alongside major polluting facilities. Additionally, carbon emissions from California's oil and gas industry rose 3.5% since the program began.

California's cap-and-trade program has provided valuable insights into creating and managing an economy-wide cap-and-trade system. The state's experience has informed the development of similar programs in other jurisdictions, such as the Canadian province of Quebec, with which California has linked its system.

The program's goal is to reduce emissions by 40% by 2030

California's cap-and-trade program is a key component of the state's strategy to reduce greenhouse gas emissions. The program's goal is to reduce emissions by 40% by 2030, with further reductions targeted for 2045 and 2050. The program works by setting a cap, or limit, on carbon dioxide (CO₂) emissions from major polluters. The emissions allowed under this cap are turned into permits, which companies must purchase to release metric tons of CO₂. The idea is to provide an incentive for companies to lower their emissions.

The program covers about 450 businesses, including large electric power plants, industrial plants, and fuel distributors, which are responsible for around 85% of California's greenhouse gas emissions. The California Air Resources Board (CARB) implements and enforces the program, which first applied to electric power plants and industrial plants emitting 25,000 tons of carbon dioxide or more per year. From 2015, it was extended to fuel distributors meeting this threshold.

While California has met its initial goal of reducing emissions to 1990 levels by 2020, the state now needs to more than double its yearly emissions cuts to be on track for the 2030 target. There are concerns that the program is not delivering the expected emissions reductions, with some data showing that carbon emissions from California's oil and gas industry rose by 3.5% since the program began. Critics attribute these increases to concessions made to the oil and gas industry, which may have blocked meaningful emissions reductions.

Despite these challenges, California remains committed to its ambitious climate goals. The state has generated $5 billion in total revenue from the cap-and-trade program, which is deposited into the Greenhouse Gas Reduction Fund. By law, 35% of this revenue is directed towards environmentally disadvantaged and low-income communities. California is also linked with the Canadian province of Quebec's cap-and-trade system, allowing businesses in one jurisdiction to use emission allowances from the other, increasing the number of businesses under the cap and reducing compliance costs.

Oil and gas companies have increased emissions since the program began

California's cap-and-trade program is one of the first and largest multi-sectoral emissions trading systems in the world. It is based on the idea that polluters can be made to pay for every ton of CO₂ they emit, providing them with an incentive to lower emissions. However, despite the program's success in reducing emissions across most sectors, there is evidence that carbon emissions from California's oil and gas industry have risen since its implementation.

ProPublica's analysis revealed a 3.5% increase in carbon emissions from the state's oil and gas industry since the cap-and-trade program began. Refineries, including those owned by major companies such as Marathon Petroleum and Chevron, are consistently the largest polluters in California. Emissions from vehicles, which burn the fuels processed in these refineries, are also on the rise. This situation is attributed to concessions made by the state to the oil and gas industry, compromising steps that would have mandated substantial emissions reductions.

The impact of the cap-and-trade program on different communities has also been uneven. Studies have shown that communities of color and low-income communities continue to be disproportionately exposed to pollution from oil refineries and other facilities. These facilities release co-pollutants, such as nitrogen oxide, which can cause respiratory infections and asthma. The distribution of these polluting facilities is closely linked to race, underscoring environmental justice concerns.

While the cap-and-trade program has generated revenue, critics argue that it may not be effective in significantly reducing emissions, especially in the oil and gas industry. The program's complex nature and potential loopholes have led to concerns about its overall effectiveness in addressing climate change. As a result, government officials are reevaluating the program and considering changes to ensure meaningful progress in emission reductions.

Environmental justice concerns have been raised by critics

California's cap-and-trade program, intended to decrease greenhouse gases, has long been criticised for failing to improve the lives of low-income people of colour living alongside major polluting facilities. A recent study by the University of Southern California found that while the level of greenhouse gas emissions in the state decreased since the cap-and-trade program went into effect, Black and Latino communities and other communities of colour are still more exposed to pollution from oil facilities than white communities.

The study also found that communities whose residents are predominantly people of colour, below federal poverty levels, and less educated are less likely to see improvements in the level of emissions from facilities such as oil refineries. Such facilities release co-pollutants, such as nitrogen oxide, which can cause respiratory infections and asthma. Some of those communities even saw the level of emissions grow worse since the start of the cap-and-trade program.

Environmental justice advocates say that those who pay the most immediate price for program shortcomings are those who live near major emitters. Cap-and-trade systems can shift where pollutants are emitted and by whom, which could alter how pollution is distributed in the environment. Low-income and minority communities are often the ones located near the most polluting facilities, and if these facilities are polluting more as a result of the program, these communities could experience a higher environmental burden.

In response to these criticisms, government officials are reevaluating the program. Officials have signalled that changes to the cap-and-trade program and how much the state relies on it are on the table.

The state is preparing an assessment of the program's effectiveness

California's cap-and-trade program has been a key component of the state's efforts to reduce greenhouse gas emissions and combat climate change. The program, launched in 2006, was the first of its kind in the United States and has served as a model for other states and regions looking to implement similar initiatives.

The basic premise of cap and trade is to set a

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