White House sends cap-and-trade warning to states

A White House statement on Friday announcing China's plan to launch a landmark cap-and-trade program was coupled with a strong message to U.S. states that they too could get a federal cap-and-trade program imposed on them if they don't comply with President Obama's climate plan.

The cap-and-trade program that Chinese Xi Jinping announced from the White House with President Obama would complement the U.S. Environmental Protection Agency's Clean Power Plan, which is the centerpiece of the president's climate agenda.

Under the Clean Power Plan, states are on the hook to develop federally enforceable compliance plans detailing how they will reduce a third of their emissions by 2030. States have the option of complying in any number of ways under the plan, including participation in a cap-and-trade program. If a state refuses to comply, however, the EPA would step in to impose a federal plan without much input from the state, and leaving it open to having a cap-and-trade program forced upon it.

A cap-and-trade program places a firm limit, or cap, on emissions and then sells credits to emitters to help them comply. Democrats failed to pass cap-and-trade legislation in President Obama's first term, and the Clean Power Plan is seen as the alternative. (by John Siclano)