Cap and trade rules for tightening carbon emissions might have died in the halls of Congress, but the world’s 8th largest economy is moving to impose tougher emission regulations on major polluters. The State of California is expected to pass the nations toughest climate law, called AB32 that will set cap and trade rules for polluters. Cap and trade works in the following manner: each polluter would receive a permit, or allowance, for the amount of emissions allowed under the cap. Each allowance represents 1 ton of carbon dioxide or the equivalent of another pollutant that would equal the cap allowed. Polluters would be allowed to trade their caps on a carbon trading market. The rules being set by California will squeeze polluters over time to encourage them with financial incentives to reduce their greenhouse gases. Under the new rules, regulators would enforce limits on heat trapping gas emissions beginning in 2012, ultimately from 85 percent of the state’s worst polluters. The amount of allowed emissions would be reduced over time, and the regulations would expand in 2015 to include refineries and fuel distributors like oil companies. The cap would reach its lowest level in 2020, when California wants its greenhouse gas emissions reduced to 1990 levels. California is hoping that they can set a national example, and are encouraging their neighboring states to enact similar legislation. California has enacted the strictest climate related regulations in the U.S. that cover energy mandates for utilities, fuel-efficiency, and low-carbon fuel standards.
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