The Importance of Pricing Transportation Fuels within California’s Cap-and-Trade Program

The report outlines the cap-and-trade system and the necessity of including transportation fuels within California’s Cap-and-Trade program. Knittel argues that not including fuels within the cap will lead to reduced market opportunities for low-carbon fuels, increased criteria-pollutant emissions, and is essential the same as subsidies for large green house gas emitting firms. He also argues of other co-benefits environmentally and economically, and of the need to set a positive model for other cap-and-trade programs.