San Francisco—California’s cap and trade scheme for greenhouse gas emissions begins in January 2013. In addition to capping emissions, the policy aims to deliver public health benefits by reducing air pollution. A new report by Climate Policy Initiative (CPI), Clearing the Air: Carbon pricing and local air pollution in California, shows that the policy should achieve both goals.

The report, which evaluates how industrial facilities respond to cap and trade, shows that the most likely outcome is that local air pollution emissions will fall. This is supported by evidence that Europe’s cap and trade scheme has reduced local air pollution from oil refineries and other industrial facilities.

Throughout the development of California’s climate program, a number of groups have expressed concerns about cap and trade’s ability to deliver air quality benefits where they are needed most. This is particularly important for poor and minority communities near oil refineries, which face higher than average air pollution levels. CPI’s analysis is good news for these communities: Cap and trade can and should improve air quality near oil refineries and other industrial facilities.

The report points out that regulatory coordination is the key to ensuring air quality benefits are realized. California’s climate program requires industrial facilities to conduct energy efficiency audits; these will identify ways to reduce greenhouse gas and air pollution emissions. Regulators can use these audits to identify where controls on air pollution may need to be adjusted to best protect air quality.

“People who live near industrial facilities should breathe easier under cap and trade,” said Kath Rowley, director of CPI’s U.S. office. “With good coordination between climate and air quality regulators, this policy should reduce California’s contribution to climate change and reduce air pollution, delivering a win-win for the climate and for public health.”

For more information and the full report, visit:


Climate Policy Initiative (CPI) is a global policy effectiveness analysis and advisory organization.  Its mission is to assess, diagnose, and support nations’ efforts to achieve low-carbon growth.  An independent, not-for-profit organization with long-term support from George Soros, CPI’s headquarters are in San Francisco and regional offices are in Berlin, Beijing, Rio de Janeiro, and Venice.


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