California vote could hinder cap-and-trade efforts

October 25, 2010

The viability of a California cap-and-trade program will hinge on the outcome of the state's November elections. Voters in California will decide on a proposition to delay action on climate change until certain economic targets are met, and the Republican candidate for governor has also promised to revisit the current climate change plan.

As reported in the Calgary Herald, this could potentially have a strong ripple effect on the developing North American carbon trading industry. British Columbia, Ontario, Quebec and Manitoba plan to join California and several other states in the launch of the Western Climate Initiative cap-and-trade market in 2012. While many observers are confident that the program will proceed regardless of the outcome in California, there is concern that the loss of the group’s largest economy could hinder the market's liquidity and efficiency.

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