Cap-and-trade cash-in

California’s landmark global-warming law is set to begin a “cap-and-trade” system later this year that will auction off pollution credits to oil refineries, power plants and other major polluters, producing billions of dollars for the state treasury.

Estimates predict the emissions-reducing legislation—part of AB 32, the Global Warming Solutions Act, signed by former Gov. Arnold Schwarzenegger in 2006—will at first generate between $1 billion and $3 billion in annual state revenue, rising to $14 billion by 2015, according to the San Jose Mercury News.

However, it is likely the use of money produced by the cap-and-trade system will be limited to projects that reduce greenhouse-gas emissions such as solar-panel installations, electric vehicles and the state’s struggling bullet-train project. State officials are set to begin auctioning credits this fall, though major business groups contend such auctions may be illegal.