In 2013, California implemented one of the world’s most comprehensive and ambitious cap-and-trade climate change policies. The economic benefit of cap-and-trade is well understood: by leveraging market forces, this intervention allows the state to meet its statewide greenhouse gas target at the lowest possible cost. But because cap-and-trade does not require specific emission reductions from any particular location, the same market forces that make the program so cost-effective may also result in undesirable equity consequences. There is growing concern that market-induced spatial reallocation of pollution could widen existing pollution concentration gaps between disadvantaged and other communities.
In this project, we seek to understand whether the introduction of California’s cap-and-trade policy in 2013 has increased local levels of pollution exposure for disadvantaged communities across the state.