British Prime Minister Tony Blair and California Governor Arnold Schwarzenegger have discussed the idea of developing a joint market in carbon dioxide emissions, designed to encourage the reduction of greenhouse gases produced and released into the atmosphere, which are believed to contribute to global warming by trapping heat within the Earth's atmosphere. Both Britain and California are significant global contributors to these emissions. For instance, during 2005, California was the 12th largest source of greenhouse gases in the world — larger than most nations.
The proposed trans-Atlantic market would set a price on carbon dioxide output, and require polluters in Britain and California to pay for the greenhouse gases that they release into the environment. Provided that participants do not exceed overall caps, they could trade the rights to release predetermined amounts of greenhouse gases. It is hoped that the financial impact would encourage all participants to reduce their levels of such pollution, thereby saving money at the same time that they help to save the planet.
This would not be the first such carbon emission market in the world. There is already a mandatory market operating successfully in Europe, initiated as a result of the Kyoto Protocol, an international treaty signed in 1997 that took effect in 2005. The agreement limits the total levels of carbon dioxide that can be emitted from factories and power plants in more than two dozen countries among the more than 160 signatory countries. The European carbon dioxide market is, as of this writing, the only mandatory one in the world. However, Canada is planning a similar market. Even here in the United States, whose federal government refused to sign the Kyoto agreement, some Eastern states are planning a regional carbon trading program. In addition, some American companies have already agreed to voluntarily limit their greenhouse gas emissions, as a result of a new market in Chicago.
A major target of the plan between Britain and California is the pollution created by cars, trucks, and other vehicles powered by hydrocarbon-based fuels. Transportation generates an estimated 20 percent of Britain's greenhouse gases, and 41 percent of California's. Blair intends for his country, by the year 2050, to reduce its emissions to 60 percent of its 1990 levels. Britain is already considering a nationwide plan, that would allow individuals and organizations various amounts of carbon allowances, which they could sell to others who wish to exceed their allowances. This would undoubtedly encourage the country's residents and companies to reduce the levels of greenhouse gases that they generate. In California, governor Schwarzenegger is calling on the state to reduce its levels to those measured in 2000, by 2010.
It is estimated that the United States generates one quarter of the world's greenhouse gases. Despite Blair's attempts to make carbon dioxide reduction a top priority internationally, President George W. Bush has repeatedly resisted those efforts. Environmental commentators speculated that the discussions and proposed plans are an attempt to sidestep the Bush administration, which opposes any reductions in greenhouse gas emissions, claiming that such cuts would cost the U.S. economy 5 million jobs. However, California government officials denied that the discussions between Blair and Schwarzenegger are an effort to bypass the Bush administration.