Unintended Consequences of California’s Cap-and-Trade: An Examination of Industrial Electricity Productivity since California Enacted Assembly Bill 32, the California Global Warming Solutions Act

Abstract

Greater American regulatory moving from federal to state governments has resulted in varying levels of environmental legislation and regulation. One example is the cap-and-trade system in California, which has been deemed a success in limiting greenhouse gas emissions as well as in earning revenue for the state. However, the coinciding production rates for polluting organizations has not been analyzed on a macro level. This study examined the air pollution and production rates of electricity organizations operating in California since cap-and-trade went into effect and found that since the legislation took effect, not only did production decreased slightly, but also, contrary to much analysis, the rates of air pollution from these organizations increased sharply.