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California’s cap and trade program allows permitted greenhouse gas emitters to receive allowances from the Air Resources Board (ARB) through auction or sale in an allowances marketplace for specific amounts of emissions, and many critics argue the system is easily susceptible to fraud. The problem is that although the ARB has its own anti-fraud rule, legal oversight committees agree that without direct action from Congress the ARB has no authority to enforce penalties or even monitor secondary markets in carbon trading, making both the marketplace and the anti-fraud rule moot.  For more on this continue reading the following article from JDSupra.

As part of California’s Cap and Trade Program, the Air Resources Board will issue will issue tradable permits (Greenhouse Gas (GHG) allowances) that authorize a permit holder to emit a specific quantity of GHGs.  Entities will obtain these GHG allowances from the ARB through an auction or reserve sale or by purchase from a marketplace.

This article was republished with permission from JDSupra.