Tuesday, October 25, 2011


Or otherwise known as the original "Clash of the Titans" in Greek mythology. The plot of these stories is usually epic generational struggle between the dominant Elder God and the rebel generation, with one side winning out and establishing alternative hierarchies. These battles were fought before the existence of mankind, setting the backdrop of the fates and the direction of history.

In a similar fashion, the struggle of forces between cap-and-trade, just adopted by the State of California as part of its AB 32 legislation, and those who feel that a more appropriate solution is a direct carbon tax, has been playing out at the highest levels in government here in the US. However, the Federal government has yet to enact a program at the national level.

This clash between all sides can be appreciably viewed as "animation wars" as well. Annie Leonard kicked it off with her wonderful cartoon animation, "The Story of Cap & Trade" in December of 2009. Countering this is an animation from Clean Energy Works in January of 2010 called "The Facts of Cap and Trade" featuring Nat Keohane, economist for Environmental Defense Fund and a special assistant to President Barack Obama on energy and environmental issues in the White House’s National Economic Council.

Nonetheless, the California Air Resources Board approved the final adoption of a cap-and-trade system on Thursday, Oct. 20, per the Sacramento Bee:

Dubbed the economic equivalent of "a moonshot" by its backers and a "job killer" by detractors, the "cap and trade" system adopted Thursday sets limits on the amount of carbon dioxide that can be produced by 350 of the state's largest industrial polluters starting in January 2013.

The state will issue a set number of "carbon allowances." Companies that pollute less than their limit can sell their unused allowances to companies that pollute heavily, creating market incentives to reduce emissions.

The program will create the nation's largest market for trading pollution allowances. Congress in 2009 rejected legislation that would have created a federal cap and trade system. In California, 90 percent of the allowances will be given out free, but 10 percent will be sold on the open market, which some say could raise $500 million a year for the state's climate-change programs.

PCL Insider summarizes the challenges this puts before the state, which makes California THE model for national air pollution control:

This new market approach to lowering carbon emission will likely create a new industry, where firms functioning much like stockbrokerages and financial consultants will manage permit purchases and other trading tools for polluters to distribute from one to another. The Intercontinental Exchange (NYSE:ICE) powered organization Chicago Climate Exchange is such a company, being the largest and longest running carbon exchange firm in North America.

Let the Games begin!