California's Cap-and-Trade Program took effect in early 2012, according to the Air Resources Board.
The program is a market-based regulation that is designed to reduce greenhouse gases from multiple sources, according to the ARB. Cap-and-trade sets a firm limit, or "cap," on greenhouse gases. Trading creates incentives to reduce greenhouse gases below allowable levels through investments in clean technologies, according to the ARB.
Credits would be needed for companies that consume or burn gas, diesel, coal or wood, along with other fuels.