Dissecting California’s Cap-and-Trade Plan: What’s your Piece of the Carbon Pie?


It sounds like an old joke: “How many allowances do you get?” “I don’t know. How many allowances do I get?”

But in reality, this is a serious question. When the California Air Resources Board (CARB or Board) released their 3,900-plus pages proposed Cap and Trade Regulation package, they unveiled for the world a regulatory scheme that will directly or indirectly touch every manufacturer, business, and individual in California.

Determining who gets to emit greenhouse gases for free and who has to pay for that right, and when, was the most anticipated of the policy questions surrounding the package’s release. The amount of greenhouse gas allowances freely distributed to entities in the program is truly a billion-dollar question. A single allowance is equal to one metric ton of CO2e emissions.

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