The Global Warming Solutions Act in the Maryland legislature mimics the policy California lawmakers passed late last summer. The MD bill requires carbon dioxide (CO2) emissions to be reduced to their 1990 levels by the year 2020. According the Chesapeake Climate Action Network, the bill also requires energy efficiency measures, cleaner cars, and directs state agencies to draft global warming solutions plans. To hit the emissions targets, the Global Warming Solutions Act uses a “cap-and-trade” system.

A cap-and-trade system is a market-based solution to cutting CO2 emissions efficiently and with flexibility, resulting in real reductions. First, lawmakers establish a limit or “cap” to the emissions (in this case lowering them to 1990 levels by 2020). Often the caps are aimed at particular sources, like power plants. Next, the amount of emissions that are allowed under the new law are divided up into individual permits. Each utility is allowed to emit a particular amount of pollution according to their number of permits (normally a permit is equal to one ton of pollution).

The permits create a financial incentive for emission cuts by designating a cost to the pollution. A company that has cut emissions sufficiently can sell their extra permits to companies not able or willing to cut emissions enough to meet the requirements. This helps to ensure that companies cut emissions while remaining profitable.

Maryland already has a renewable energy standard that requires 7.5 percent of its energy to come from renewable sources by 2019. It’s also passed the Healthy Air Act, a strong power plant clean-up bill that will cut mercury and CO2 emissions. These laws and the Global Warming Solutions Act are just more examples of the states taking meaningful action on global warming and energy. The federal government will have to work even harder to catch up.

Hugg.com: Global Warming Solutions Act
Chesapeake Climate Action Network
Maryland Sierra Club
Union of Concerned Scientists