Fed up With federal inaction, states act alone on cap-and-trade

On the other hand, with functioning carbon markets in California, Quebec, and states in the RGGI, it is not clear why they all could not merge to become one entity. Some significant technical details would need to be worked out, but if places as far away as California and Quebec can link up, why not the northeastern U.S. as well?

"To be honest, I haven't given it a whole lot of thought," Kelly Speakes-Backman, chair of RGGI's board of directors, told Bloomberg in a Sept. 24 interview. "I met for the first time the minister of environment for Quebec yesterday, and it was really a five-minute conversation that we had. And I've personally had no discussions with California."

That could change as California and Quebec begin trying to actively recruit new members.

An alternative approach, put forth by a former top official at the Chicago Climate Exchange, calls for California to tweak its carbon market to make it easy for polluters in other states to opt-in on a voluntary basis even if their own states are not members. The idea is laid out in an Los Angeles Times op-ed, which says by doing this, California would be "creating a de facto national system with the stroke of a pen."

Such an idea would be controversial and complicated, but it underscores the fact that states have an array of creative options to reduce carbon emissions. And since the federal government is doing so little, it is likely that states will continue pushing the bounds of experimentation forward.