Actually, Hutch, it's about both saving the environment and controlling (money or people, which works out to be about the same thing), but not the way you might think. Cap and trade seemed (it's been called into question recently) to be working in South Coast for traditional air pollutants, so using it for carbon control was a logical idea. But an auction system (in both South Coast for traditional pollutants and ARB for GHGs) depends on scarcity to keep costs up, so if emissions drop for other reasons there's less need for credits, and they become cheaper. Scarcity can also be manufactured by artificially retiring credits more quickly than emissions drop otherwise - not a popular move, and so far hasn't really been done in either South Coast (where EPA is rattling some cages as a result) or at ARB.

It's kind of amusing, really: the regulatory folks are doing such a "good" job of mandating cleanup of both traditional and greenhouse emissions, and industry and people in general are doing such a good job (at least in CA) of meeting those mandates, that many emission sources no longer need as many credits to keep operating as the system designers expected. Shazaam!

Passing legislation to tighten standards after 2020 could have a "scarcity" effect if emission credits are retired aggressively to force more immediate "real" emission reductions. But I don't see that happening; rather more regulations will push emissions down in general, keeping downward pressure on the value of credits. As Bob said, HSR and ARB should be looking for something other than depending on cap 'n trade as a general revenue source.