California to Debut Landmark Cap-and-Trade System California is debuting its new, landmark cap-and-trade program with an auction of greenhouse gas pollution permits, despite an eleventh-hour lawsuit filed by the state's largest business group. The cap-and-trade plan is a central piece of the state's 2006 global warming law, AB32, a suite of regulations meant to reduce dramatically the state's emissions of heat-trapping gases. FILE - In this April 30, 2008 file photo, American flags are seen near the Shell refinery, in Martinez, Calif. On Weds., Nov. 14, 2012, California's largest greenhouse gas emitters will for the first time begin buying permits in a landmark "cap-and-trade" system meant to control emissions of heat-trapping gases and spur investment in clean technologies. The program is a key part of California's 2006 climate-change law, AB32, a suite of regulations that dictate standards for cleaner-burning fuels, more efficient automobiles and increased use of renewable energy. The program places a limit, or cap, on emissions from individual polluters. Businesses are required to cut emissions to cap levels or buy allowances from other companies for each ton over the cap that is discharged annually. If a business were to cut emissions below the cap, it could profit by selling its extra allowances. The program's first auction on Wednesday is being closely watched, as it will essentially put a price on carbon emissions for the first time in state history.