A Price Tag on Carbon as a Climate Rescue Plan - by Justin Gillis, NY Times

California’s program is the latest incarnation of an increasingly popular — and much debated — mechanism that has emerged as one of the primary weapons against global warming.  From China to Norway, Kazakhstan to the Northeastern United States, governments are requiring industries to buy permits allowing them to emit set levels of greenhouse gases.  Under these plans, the allowable levels of pollution are steadily reduced and the cost of permits rises, creating an economic incentive for companies to cut emissions.

The system encourages companies to find the least expensive ways to make the cuts, either by adopting cleaner energy technology or by investing in outside emission-control projects, like the Pagels’ methane digester.

Congress rejected a national plan of this type during President Obama’s first term, but 10 states, including most of those in the Northeast and mid-Atlantic, have developed their own programs.  And the approach is expected to get a huge lift on Monday when Mr. Obama unveils a long-awaited national plan requiring states to lower their power plant emissions.  One likely effect will be to encourage more states to adopt systems like California’s.

Already, the approach is spreading worldwide, with the number of people living in places that have such a system nearing one billion, or 14 percent of the world’s population, including about 80 million Americans.

“The point now is to say, look, this can work, it can be scaled, and please join,” said Frank A. Wolak, an economist at Stanford University.

A Price Tag on Carbon as a Climate Rescue Plan - by Justin Gillis, NY Times