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Impacts of California’s ‘Cap And Trade’

Jim Waring, CEO and president of CleanTech San Diego, talks about California's "Cap and Trade" program.

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Additional Information

California cap & trade information - California Air Resource Board

California’s cap-and-trade program, designed to reduce air pollution, will begin Jan. 1, 2013.

Jim Waring, head of CleanTECH San Diego, told KPBS the program will cap the amount of carbon dioxide a business can omit. If a business stays below that cap, it can trade its leftover carbon dioxide to other businesses. In other words, businesses can buy the right to produce more carbon dioxide.

"You buy the additional credit, some people would say you buy the right to pollute, but what you're really doing is you're buying tons of CO2 emissions allowances," Waring said.

But Waring said he doesn't think the option to buy will encourage businesses to continue polluting.

"As a company, you're not going to incur a cost just because it's easier," he said. "You're going to try to not have to buy those credits."

The first part of the cap and trade law will only apply to businesses who produce more than 25,000 metric tons of CO2 equivalents a year. That includes San Diego businesses Qualcomm and SDG&E.

An average family of four emits 20 metric tons in a year--1,250 times less.

The state of California has also reserved some carbon dioxide credits to sell to businesses. Last week, the California Assembly approved a plan for how to spend the money it earns by selling these credits.

Waring said the question of how to spend that money has become somewhat controversial, but said the idea is to spend it on energy conservation programs.

The cap-and-trade law requires a 25 percent reduction in California's CO2 emissions by 2020.

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