By Jean-Philippe Brisson, Stanford Renas, and Daniel Firger (12/20/2011; 7 pages)

California’s greenhouse gas cap-and-trade regulations are set to take effect Jan. 1, following the Dec. 13 approval by the state’s Office of Administrative Law. The authors highlight key elements of the program, including an increase in the trading frequency, volume, and price of California compliance instruments and coverage of emissions associated with imported energy sold in the state. The authors also review several outstanding issues with the California program relative to other cap-and-trade schemes, including buyer liability for invalidated offsets, auction purchase limits, and potential legal challenges.