California will debut 'cap and trade' scheme

California is debuting its new cap and trade scheme - a radical attempt to reduce emissions in the state.

The scheme is in-keeping with the state's 2006 global warming law, which was an attempt to reduce emissions of heat-trapping gases.

Under the new system, individuals are not allowed to emit more than a certain amount of pollutants.

When the cap has been reached, businesses and individuals will be penalised for going over their allowance.

The only way that they are allowed to create more emissions is by buying allowances from other companies for each ton over the cap they go.

A business is given an annual figure that it is not allowed to go over.

Financially, the cap and trade scheme is beneficial for those businesses that plan to reduce their emissions, as they can sell on their extra allowance to companies who have not been as environmentally and fiscally savvy.

For the first time in the state's history, a price has been put on carbon emissions.

Oil companies, power plants and factories are expected to be hit the hardest, while companies that have already made plans to reduce emissions will welcome the new scheme.

Although many are thrilled with the environmental advancements, others feel that this step is an unfair one.

The California Chamber of Commerce has sued the state, saying that the sale of allowances is an illegal tax.

However, others feel that the measure is a completely necessary one in changing the air pollution levels of California.

"There's a positioning that this is the business community versus the environment, and that's a false premise," said Susan Frank, director of the 1,242-member California Business Alliance for a Green Economy.

"It's about leveling the playing field with fossil fuels. Companies that get ahead of the curve and make changes in the way they operate will benefit."