California CAT

I learned recently that Cap-and-Trade policy in California may not include rules for allocating emissions credits to new energy producers entering the market after initial distribution. As far as I can tell, they will have to buy them from other incumbent sources :/

I’m very curious about what this may do (?). Does this insulate the market from more competition? Would it be better to encourage the development of new companies in energy production, or would that only prop up small entities with too little capacity to adapt to fluctuating market forces and consumption demands?

Ideas are welcome.