Climate Change Policy In California: Balancing Markets Versus Regulation

Climate policy in California has been at the forefront in the North American effort to fight global warming. California has been a leader in energy policy for decades. The paper explores the state’s energy policy over the past few decades, as well as the economic, psychological, and institutional factors that support the emerging best practice. It describes climate change exernalities that are the basis for carbon pricing policies, such as carbon taxes or cap-and-trade, and explores some of the institutional challenges created by climate change policy. Also emission trading schemes such as cap-and-trade programs.