Opportunities and Challenges for Cap-and-Trade in California

Michael Wara, Assistant Professor of Law Stanford University

Monday, January 24, 2011 | 04:15 PM - 05:15 PM | NVIDIA Auditorium, Jen-Hsun Huang Engineering Center | Free and Open to All

In December, the California Air Resources Board adopted a cap-and-trade program covering approximately 85% of statewide emissions of greenhouse gases.  This regulation sets a limit on emissions of greenhouse gases and then allows trading of pollution permits by entities covered under the program.  The design of California’s system is both balanced and innovative, when considered in the context of other cap-and-trade regimes.  As such, the program has the potential to serve as a model for future federal legislation.

However, because of both its ambition and its scope, the California program is likely to be the place where the law governing state-level regulation of GHGs is clarified.  The new regulations will likely be challenged in court on a number of grounds - the recently enacted Prop 26, the impact that the regulations will have on interstate sales of electricity, and the fact that the EPA is taking steps to regulate GHGs under the Clean Air Act.  Resolution of these legal questions will ultimately determine whether California is allowed to assume the leadership role for climate change that it has historically played in the development of US environmental law and regulation. 

No slides available