The state of California in the US has introduced a new cap-and-trade program that includes ion of greenhouse gas pollution permits.

The new programme was introduced even as state's largest business group a law suit against the move. The cap-and-trade plan is the core of the state's 2006 global warming law, AB32. The law includes a set of regulations that are aimed at significantly reducing state's emissions of the greenhouse gas.

The new programme will place a limit on emissions from individual polluters and companies will be required to purchase permits for each ton of pollution above their individual limit in the state. If businesses are able to reduce their emissions to below that of the limit, they would able to profit by selling the allowances to others. The first auction on Wednesday will put a price on carbon emissions in the state and will set a level for future exchange of permits between companies.

The California Chamber of Commerce has filed a law suit against the government challenging the validity of state's cap-and-trade program. The lawsuit was filed in Sacramento Superior Court on Tuesday and is not expected to stop the government from introducing the system. Denise Davis, a chamber spokeswoman said that the lawsuit is not aimed at halting the auction process cut is to challenge the whole system.