Dirty companies: prepare to pay

California has adopted the country’s first carbon-emission cap and trade with goals of reducing CO2 pollution to 1990 levels by 2020.

California’s Air Resources Board will place an annual cap on the amount of carbon polluting industries can emit beginning in 2013, according to media sources. If the polluters do not reach their designated cap, they can sell their excess “carbon credits.” Likewise, if a business knows it will exceed its carbon cap, it can buy more carbon credits, effectively creating a charge for those entities polluting the most.

Tim O’Connor, director of the Environmental Defense Fund’s California Climate and Energy Initiative, says in a statement that this move is sure to get the attention of other states looking to adopt a new carbon-emission policy.

“States are not only looking at how it’s going to be implemented, but they’re looking at the fact that it was passed at all,” he said.