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But amid Europe's economic malaise, many companies have chopped back production, leaving them with excess allowances.
Companies would be assigned emission allowances, which could then be traded on the open market, with more-efficient companies selling excess allowances to less-efficient companies that could not immediately meet their quotas.
As California's market gears up, each business must decide whether it is more cost-efficient to reduce its emissions or buy excess allowances from other companies that do not need them.
Companies can sell excess allowances to others, and they'll benefit from buying early if future auctions raise the price of polluting.
Companies that emit too much would need to buy additional permits, and companies that are more efficient can sell their excess allowances.
Factories that cut emissions below their designated caps could sell excess allowances to other companies or bank their allowances for future use — thus cutting their costs.
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The scholarship includes return airfare; a monthly maintenance allowance; tuition and other approved fees; and book, thesis, warm clothing, and excess baggage allowances.
Keith Taylor, the Green MEP for South East England added that "with big climate change talks coming up in Paris in December it's crucial to create effective mechanisms to ensure that excess carbon allowances cannot undermine emission reduction targets".
To encourage the utilities to reduce those greenhouse gas emissions, companies that cut their emissions below their designated caps are permitted to sell or trade their excess carbon allowances in online auctions held four times a year.
As an incentive for power plants to pollute less, the states allow the plants that cut their emissions below the cap to sell or trade their excess carbon allowances through online auctions four times a year.
U.S. companies, he warned, might even sell their excess carbon allowances and plow the proceeds into new polluting factories in China.
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