California has become the first state in the U.S. to adopt a cap-and-trade system to reduce carbon emissions, while China appears to be taking the carbon tax route. What’s more, California has just reached an agreement with Quebec to exchange carbon permits. Watch for more to get done to reduce climate-changing greenhouse gases at the state, provincial and local levels than at the federal level in certain countries, says Erwann Michel-Kerjan, managing director of Wharton’s Risk Management and Decision Processes Center.

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