STARTING ON JAN. 1, California will begin the nation’s most ambitious experiment yet in fighting climate change, and it will do it more or less alone. For environmentalists depressed by years of the United States’ unproductive “debate” on global warming, this moment is heady — and perilous.
Beginning in 2013, the nation’s largest state, the ninth-largest economy in the world, will put a price on the greenhouse gas emissions responsible for global warming. California has established a cap-and-trade program, a design similar to what Congress considered but failed to pass in 2010. Perhaps the Golden State in the new year will prove once and for all that markets can and should be marshaled in the fight against global warming.
Pricing carbon emissions is undoubtedly the right concept. California’s cap-and-trade mechanism is supposed to minimize costs by establishing a statewide limit on total emissions and a market where businesses can buy the right to pollute a certain amount under that cap. When firms and their consumers must pay for their emissions, they find the cheapest ways to pollute less.