Climate Break

Cap-and-Trade Market for Carbon Credits with Mary Nichols

Episode Summary

How does a cap-and-trade program for greenhouse gas emissions work? To find out, former California Governor Jerry Brown spoke with Mary Nichols, the former Chair of the California Air Resources Board, during a California China Climate Institute discussion about the state’s pioneering program. For a transcript, please visit https://climatebreak.org/cap-and-trade-market-for-carbon-credits-with-mary-nichols-california-china-climate-institute/

Episode Notes

For a transcript, please visit https://climatebreak.org/cap-and-trade-market-for-carbon-credits-with-mary-nichols-california-china-climate-institute/

Episode Transcription

Ethan: How does the Cap-and-Trade program for greenhouse gas emissions work? To find out, former California Governor Jerry Brown spoke with Mary Nichols, the former Chair of the California Air Resources Board, during a California China Climate Institute discussion about the state’s pioneering program.

Ms. Nichols: The goal was to set a cap the neighborhood has to live under, reduce that cap over time so it would get lower and lower, like a game of musical chairs. Take away allowances from people and force them to clean up, but give businesses the opportunity to choose out of comply. The board was able to tell 700 firms and then extend it to natural gas and gasoline fuels, a mandate that they would reduce their emissions by a certain amount of turns. And they would have to have enough allowances to cover their emissions.

Ethan: The state auctions off Cap-and-Trade allowances to these businesses, with the proceeds going to California residents to offset any increased cost of electricity and natural gas. The rest of the money goes toward reducing greenhouse gas emissions or improving water quality, expanding public transit, increasing access to renewable energy, and building efficient, affordable housing. This is Ethan Elkind of Climate Break, bringing you 90 seconds of climate solutions. For further information on the California Air Resources Board and Cap-and-Trade, and for more climate solutions, go to climatebreak.org, or wherever you get your podcast.