As California implements a cap-and-trade system for carbon dioxide (CO2), a major contributor to global warming, it’s eyeing the European CO2 market as a model. Creating similar market-based mechanisms to fight global warming could create a more thorough, comprehensive solution to the problem.

California officials met with EU lawmakers last week to discuss cap-and-trade, a system in which industries are given a limit as to how much CO2 they can emit. For companies that cut emissions more than what is regulated, they receive credits. That company can then turn around and sell those credits to other companies that cannot or will not cut their CO2 pollution, thus allowing them to meet their requirements, too. So the further a company can reduce its CO2, the more money it can make from selling or trading its extra credits.

The California Global Warming Solutions Act signed into law last fall by Governor Schwarzenegger requires a CO2 market, but the state has learned that creating its own unique market could be very costly and complicated. Linda Adams, secretary of the California Environmental Protection Agency, told Reuters: “Our governor has asked us to design a market that could be compatible with the ETS, the European trading system.”

California is the 12th largest CO2 polluter on the planet, so their entry into the European market could mark the beginning of a global CO2 trading system. Adams hopes that other nations will join:

"California and the European Union can't solve this problem alone. We think working together and working with China and India and other countries will lead to a solution."

Reuters, via Planet Ark