Commentary
President Donald Trump has announced his intention to shut down California’s cap-and-trade program, which raises revenue for the state and reduces greenhouse gas emissions. If successful, the Trump administration will deal a major blow to California’s ambitions to be a climate change policy leader by starving multiple state programs of funds, but success is by no means guaranteed.
Cap-and-trade is a pollution-reducing mechanism popular with some economists. Instead of banning emissions outright or explicitly setting limits on the volume of pollutants each company may generate, the state sets an overall limit on emissions and then auctions off permits that allow firms to generate a portion of the overall emissions target….