SAN FRANCISCO: California is set to unveil a new weapon in its fight against global climate change on Wednesday when it holds its first sale of carbon emissions permits, a landmark experiment that it hopes will serve as a model for other US states and the federal government.

The state's carbon auction is a key step in the initiation of its “cap-and-trade” program, a policy where the state sets a limit, or cap, on the amount of heat-trapping gases released by manufacturers, oil refineries, electric utilities and other large emitting businesses.

Those companies can then either reduce their emissions or purchase carbon permits, also known as “allowances,” on the open market from companies that have extras, the “trade” part of cap and trade. The number of allowances in the system will decline over time.

Environmentalists have long advocated cap-and-trade as a market-based means of limiting greenhouse gas emissions. Thirty European countries have been using it since 2005, and markets are operating or in development in Australia, China, Japan, Kazakhstan, New Zealand, Quebec and South Korea.

With Superstorm Sandy drawing attention to climate change and a strong Democratic showing in last week's election, carbon emission limits could again be on the national political agenda in the United States.

But past efforts to implement cap-and-trade nationally have faltered in the face of opposition from congressional Republicans and others who say it will increase energy costs.