California’s cap-and-trade program “sets a statewide emissions limit on sources responsible for 85 percent of California’s greenhouse gas emissions.” The “cap” grants each company a wider allowance should they emit less than this cap. This policy was set in 2013; the cap for each company is set at about 2 percent below the emissions level expected for 2012, and has slightly declined each year since, with a goal of eventually returning to California greenhouse gas emissions levels in 2020.
This system sets an economic incentive for big polluters to reduce their emissions — if companies pollute less than their total allowances, they can trade more widely. However, if companies go over their allotted emissions, they are forced to buy additional allowances. Because the total allowances are “capped,” the state ensures that total emissions stay below the set limit.
The state cannot allow polluting companies to do whatever they want and release unlimited emissions, impacting the health of California residents. Cap-and-trade is an important step toward reducing greenhouse gas emissions on a global scale, and decreasing negative health effects faced by local residents who live near a pollution source.
For California, this is a win-win-win effort. Entities will reduce their emissions. The set “cap” allows the state to ensure that these reductions add up to the number that is needed and keep companies’ emissions under the intended limit. Finally, the state uses the money made by selling these allowances toward programs for additional emissions reductions. Dozens of countries have embraced cap-and-trade with great success, and if California wants to remain in the global conversation on mitigating the world’s environmental crisis, cap-and-trade policies in the state are a necessity.
While the costs of purchasing pollution credits could possibly cause less manufacturing and labor jobs, it is unlikely that this would have a large impact. The entire idea of the cap-and-trade program is that it will allow entities to reduce emissions where it is cost-effective to do so, instead of forcing a mandatory, set limit on all entities, which would undoubtedly harm the entities which cannot afford it. Instead of being forced to meet a certain established limit, entities are still able to control their own pollution levels — to an extent. Additionally, cap-and-trade will likely add jobs in renewable energy and other fields.
At some point or another, the world — and California — will need to start lowering emissions and transitioning to renewable energy. Even if we were fine with the harmful impacts on human health or didn’t believe in climate change, transitioning to cleaner energy is inevitable since our remaining fossil fuels are limited. Losing a few manufacturing jobs is obviously not ideal, but it also is a natural effect of transitioning to cleaner technologies that are necessary to promote health.
California needs to put its residents’ health first, which is suffering as a result of greenhouse gas emissions. Californians experience the worst air quality in the nation, and over 95 percent of the state’s residents live in areas with unhealthy air. The annual health impacts of exceeding the state’s standards for air pollution include nearly 7,000 premature deaths, 7,000 hospital visits for respiratory or cardiovascular disease, 350,000 asthma attacks and countless others. Arguments about how cap-and-trade will reduce jobs or economically harm businesses distract from the fact that it is effective in mitigating these negative health impacts.
California’s cap-and-trade program has inspired action at the global level, and the state is now partnering with Canadian provinces to implement joint cap-and-trade programs. It also is collaborating with Mexico and China as the two nations work to price carbon. This demonstrates how the cap-and-trade program solidifies California as a global leader in environmental policy, which is even more important to our world now that the United States as a whole is falling behind in the environmental realm.
Erin Rode is a junior majoring in print and digital journalism and political science. “Point/Counterpoint” runs Wednesdays.