Cap-and-trade program

It is official White House policy that the country reduces its green house gas emissions 80 percent by 2050.  The air-pollutionmechanism to achieve this is an economy-wide cap-and-trade program.

Just exactly what is a cap-and-trade program? It is a regulatory program by which a limit is placed on the amount of emission that a facility can emit. If the facility is able to come in under the limit (cap) through operational means or emission control, it can then sell (trade) its emission surplus in an open market. If  it is not able to meet the cap, it must go to the same open market to purchase (trade) emission credit to make up the deficit.

An excellent example of a cap-and-trade program is the California’s Regional Clean Air Incentives Market (RECLAIM) implemented by the South Coast Air Quality Management District (AQMD) in 1993 for NOx and SOx.

The AQMD issued its review or progress report of its RECLAIM awhile back and it is very instructive. Click on the links below to download the AQMD reports and read the lessons learned:

RECLAIM policy report part 1

RECLAIM policy report part 2

RECLAIM policy report part 3


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