The California cap-and-trade program was created in 2013 to assist the state’s goals of its greenhouse gas emissions being reduced to 1990 levels by 2020 and to 80% below 1990 levels by 2050, according to the Center for Climate and Energy Solutions.
The revenues that are accrued from the program go directly to California’s Greenhouse Gas Reduction Fund, which disperses funding to state agencies that are working to reduce greenhouse gas emissions further.
RGGI is comprised of states located in the Northeast and includes Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia.
RGGI has a Cost Containment Reserve that is made up of a set number of allowances beyond the cap that are held in reserve.
The KraneShares California Carbon Allowance ETF offers exposure to the California cap-and-trade carbon allowance program, one of the fastest-growing carbon allowance programs worldwide, and is benchmarked to the IHS Markit Carbon CCA Index.