Regulation

California Experiments With Controversial Legislation

Cap and trade and a ban on employment credit checks should make the state especially enticing to businesses

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On the eve of 2013, state officials are busy readying for tens of thousands of new laws that go into effect on the first day of the year. The nation's most populous state, California, is  serving as a laboratory for several legislative measures, embarking on a number of policy experiments that were too controversial to be implemented on the national scale.

At the top of that list is California's cap and trade program for greenhouse gases. Starting January 1, large power plants and industrial facilities in the state will have to either lower their emissions or be forced to buy credits at auction. The credits, called allowances, make the cost of polluting more expensive. Federal cap-and-trade legislation failed in Congress in 2009.

NEXT: Hollande Pledges To Pursue Tax on France's Wealthy

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  1. “The nation’s most populous state, California, is serving as a laboratory for several legislative measures,”

    No, it isn’t.
    There are geographical considerations that make comparisons suspect. A company can move from, say, Cincinnati to northern Kentucky quite easily. Moving a company from the Californian Bay Area to Reno is not a valid comparison.
    The Californian government is trading on the econ difference between those alternatives, while claiming it is nothing of the sort.
    As in the case of the value of any good, the CA government will find the limits of increased costs, and, as a government, it will find them too late to make effective changes.

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