Cap and Trade Monitoring and Enforcement
California Environmental Protection Agency (CalEPA)
California Air Resources Board (ARB)
California Attorney General’s Office (AGO)
U.C. Berkeley’s Center for Law Energy & the Environment (CLEE)
Made possible through the generous support of the Energy Foundation.
This workshops were convened on June 18, 2009 and November 12, 2009 to discuss monitoring and enforcement strategies for successful cap-and-trade programs. Attendance was made up of 40-50 key experts in the fields of environmental policy, financial markets, and regulatory systems, including representatives of state and federal regulatory agencies, key regulatory stakeholders, international experts, commodities market representatives and academics.
While much of the debate to date over cap-and-trade programs has focused on cap levels, timetables, offsets and the role of carbon credit auctions, the purpose of these workshops was to focus instead on compliance with and enforcement of well-formed market rules. Our specific interest is on the design of effective market rules and monitoring systems, enforceable measures for emissions reductions, and ensuring effective responses to market irregularities, manipulation, and fraud.
The discussion was focused on identifying potential market manipulation schemes and developing effective monitoring and enforcement strategies that are believed to be essential components of any effective cap-and-trade program established at the state, regional or national levels.
Specific topics included:
• Monitoring and enforcement challenges associated with cap-and-trade programs designed to reduce greenhouse gas emission levels
• Defining potential markets and motivations
• Assessing relevant, existing models for cap-and-trade regulation
• Exploring promising enforcement and monitoring systems to be integrated into future cap-and-trade programs and concepts needed to go forward
• Appropriate next steps
These workshops have evolved into an ongoing working group that continues to convene via conference call. There are discussions of other workshops in the future, though none are currently scheduled.