Carbon Cap and Trade

The days of carbon cap and trade are coming. Eleven states have drafted legislation to impose cap and trade policies with California at the helm. They are now waiting for the EPA to grant them authority to enact the legislation. The basic premise of the cap and trade process begins when a company is allocated carbon emission maximums. If the company does not exceed their maximum they may put the remaining carbon emissions out for trade as carbon credits. Companies that exceed their limits then purchase these credits to offset their exceedances and achieve their emission goals. The carbon credit sales and purchases are certified by third parties thereby ensuring that the procedures are legitimate. The European Union already has a similar process in place. This process is doable and over time it will be an effective means to reduce greenhouse gas emissions and carbon dioxide levels.