“Cap-and-trade sets a cap on industry emissions and auctions off permits to companies for the “right” to pollute up to that cap. It allows industries to buy, hold, and trade those permits, puts a monetary value on emissions and, the hope is, creates a monetary incentive to reduce them.
However, the largest source of emissions in the state—the transportation sector, which accounts for half of all greenhouse gas emissions in California, and ninety percent of the state’s diesel emissions—is harder to tackle, and largely unaddressed by cap-and-trade. The state has so far relied on encouraging new technologies, clean fuels, and sustainable land use planning that can make driving unnecessary.
But the largest of those mobile sources, including trucks, locomotives, and ships are not subject to CARB’s authority because they are regulated by the federal government. And that is a problem, given the current administration’s lack of interest in addressing environmental problems.”
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