Letter to CARB On Emissions Leakage Issues in a Cap-and-Trade Program

Letter commenting on issues relating to emissions leakage in a California cap-and-trade program. Minimizing the shifting of emissions out of California in a way that reduces the net decrease in global greenhouse gas emissions due to California’s programs is a statutory requirement of AB 32 and an important design objective in any cap-and-trade program. And California should aim to avoid shifting emissions to other states and countries that lack, or have less stringent, climate programs, but it is possible to overstate the ease with which economic activity and associated emissions can be relocated, and we believe that CARB should be suspect of exaggerated claims that industries will relocate or expand in other jurisdictions as a result of AB32.