About
California’s carbon cap-and-trade program is one of the largest multi-sectoral emissions trading systems in the world. The program operates by setting an annually decreasing cap on emissions, which incentivizes polluters to cut emissions to stay under the limit. Introduced in 2012, this market-based approach serves as a critical component in the state's strategy to reduce greenhouse gas (GHG) emissions by 40% below 1990 levels by 2030. However, while the cap covers roughly 85% of the state’s total emissions, it alone is not enough to meet California’s climate targets. Additional strategies are needed to address the remaining 15% of emissions and ensure the state stays on track to meet its ambitious climate goals.
Tightening the cap is one way to accelerate emissions reductions. This means expanding the existing cap-and-trade program to include other sources of emissions like those from Natural and Working Lands (NWL). Because NWL includes agriculture and forests, integrating land-based carbon into California's cap-and-trade program may help mitigate carbon emissions at a significantly lower cost. It may also generate significant environmental and social co-benefits such as biodiversity, water quality, and reduced heat. Working closely with The Nature Conservancy, this project seeks to understand how we can leverage recent advancements in carbon measurement and improved understanding of ecosystem processes and market design to provide new and compelling motivations to include the land based emissions into California's cap-and-trade program.