Cap-and-trade kickoff

California’s landmark cap-and-trade market began on Nov. 14 as carbon-emission allowances were auctioned off to dozens of oil refiners, cement manufacturers and other major polluters.

The market is a key component of AB 32, the Global Warming Solutions Act of 2006, which aims to force companies to cut greenhouse gases or purchase allowances, according to The Sacramento Bee.

While supporters maintain the market will allow businesses flexibility in their approach to reducing emissions, business coalitions like the AB 32 Implementation Group believe the market will become a severe burden on state businesses, particularly in 2015 when refineries will have to purchase more credits to cover greenhouse-gas emissions from vehicles.

The auction offers more than 62 million allowances, each representing the right to emit one ton of carbon, with the minimum bid set at $10 a ton. Ninety percent of emission allowances will be free for the first two years, but the percentage of handouts will decrease after that period.