Doctoral Dissertation Research: Bigger: Environmental Governance in the Carbon Economy: Regulating Greenhouse Gas Emissions in California#s Cap-and-Trade Market

On November 14, 2012, the California Air Resources Board (ARB) will conduct an auction for permits that represent the right to pollute the atmosphere with greenhouse gases (GHGs) through industrial activities. This is the latest step in ARB's ongoing project to implement California's Global Warming Solutions Act of 2006, which charged the agency with creating a financial market that would enable industrial polluters to trade the rights to emissions through a cap-and-trade program. In this program, a limit, or 'cap' on the amount of GHGs that can be emitted is determined through consultation between regulators, climate scientists, and industrial concerns. Regulators then allocate through free distribution and auction the rights to emit GHGs among industrial sources. Individual polluters are thus often required to reduce their emissions relative to their current practices. If emitters are able to reduce their output of GHGs more than strictly required they have the right to sell the difference to emitters who have not met their emissions reduction obligations. Parties other than the emitters of GHGs are also encouraged to participate in the market through buying and selling of emissions rights, particularly financial firms. The success or failure of the program to reduce GHG emissions in a cost effective manner will help to shape the future of environmental regulation across the United States and beyond. The goal of this study is to discover the principals, practices, and relationships necessary to create a potentially multi-billion dollar market that aims to improve environmental quality. This study will break new ground in understanding the creation, financing, and monitoring of a potentially sprawling new commodity market created by government. Having already conducted preliminary fieldwork with the ARB, we will continue to analyze the activities of key actors in the months preceding and following the formal inauguration of the California carbon market on January 1, 2013 through interviews and participant observation, supplemented by archival research. We will describe and document the ways that regulators, regulated entities, NGOs, and new 'green' financial firms interact as they develop and refine the rules and institutions necessary to govern what will be the second largest carbon market in the world.