California is both one of the largest economies and one of the largest emitters globally, making its climate change policies some of the most important in the world. They are also some of the most ambitious. In particular, California’s Global Warming Solutions Act of 2006 (AB32) set a series of policies and programs across all major business sectors to return California emissions to 1990 levels by 2020. A key component of this set of policies is the Cap and Trade Program, which caps greenhouse gas (GHG) emissions from key business sectors in California. With the Cap and Trade Program in its second year of full operation, CPI studies how firms make business decisions in the presence of a carbon price — whether abatement options that have been identified as technically feasible prove to be attractive in practice, or whether barriers prevent firms from pursuing otherwise cost-effective abatement options.