Leakage in California's Carbon Market

Leakage in California's Carbon Market
The Electricity Journal 27(9): 36–48 (2014), doi 10.1016/j.tej.2014.09.014

AbstractAlthough California's carbon market is generally seen as a model climate policy, recent reforms now credit utilities for shifting legacy coal contracts to their unregulated neighbors, a practice that causes leakage. To the extent the market relies on leakage to generate compliance on paper, it is producing the false appearance of emissions reductions through an accounting scheme that does not reflect real climate benefits.