In what could prove a disastrous move for consumers and businesses, Governor Arnold Schwarzenegger is poised to sign legislation imposing statutory limits on greenhouse gas emissions in the state of California. The system of restrictions, which calls for a 25% cut in emissions by 2020, is to be administered by the California Air Resources Board under a so-called “cap-and-trade” system. A cap-and-trade scheme will restrict the total emissions allowed, in effect functioning as a tax on energy use throughout the state. “It is unfortunate that California’s state government would be pushing such a wrong-headed policy at a time that entrepreneurs...