Regulatory: Why California's Cap and Trade Program Impacts Every Business

By: Thomas R. McMorrow
– Inside Counsel

The January 2013 start of California’s first-in-the-nation program to cap greenhouse gas (GHG) emissions and create a market to buy and sell carbon emissions is receiving daily attention from regulators, environmentalists and California’s industrial sector. Stakeholders and industry media are treating this launch of California’s Cap and Trade program as a watershed event for their respective interests. They are right, of course.

Cap and Trade involves broader issues balancing the environmental and industrial sectors’ interests. The program is a multi-billion dollar source of new revenue for the deficit-ridden state. California is also setting national and perhaps international policy with Cap and Trade. The program will have economic ripple effects far beyond its regulatory boundaries. Meanwhile, the courts have not even decided whether the program will go forward and in what form. Consequently, California’s Cap and Trade program should be of interest to us all.

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