From kiosks to megastores: The evolving carbon market

Abstract

Markets can play a key role in mitigating the effects of climate change by providing added flexibility, allowing emissions reductions to occur at a lower cost while maintaining a set level of emissions reductions. With careful regulatory design, both industry and consumers can benefit from low costs. We review the state of carbon trading globally and in the United States, the West and California. New policies and regulations related to AB32, which mandates reductions in California's greenhouse-gas emissions to 1990 levels by 2020, are beginning to take shape. California has a unique opportunity to establish a new ethos for carbon trading by acknowledging unavoidable mitigation costs, and by designing a market-based solution that is fair, equitable and transparent, and protects the most vulnerable members of society.