Cap and Trade: Is this the Way to Go?
Cap and Trade is an emissions trading program being discussed as a mandate by the Obama administration to help reduce the amount of carbon dioxide in the atmosphere. The concept involves capping or limiting the amount of greenhouse emissions a company can discharge per year. If a given company needs to pollute more because of its industrial needs, it can trade with a company that does not need to pollute because they have converted to an eco-friendly practice or simply do not produce in this manner. If a company holds extra carbon permits that it does not need, it can exchange these permits with a company that does for money. The idea behind this practice is that eventually emission caps will become more rigid and the carbon permit supply will lesson by becoming moot or more expensive, whereby those companies who are still polluting will be forced to clean up their act.
The European Union Emission Trading Scheme has been working with a similar mandate that is seeing advancement in lowering greenhouse gases. In the United States a successful program was created in the mid 1990′s to deal with acid rain caused by the emission of sulfur dioxide. Because companies do not need new technology for clean up, this has been a much easier program to instate, as it does not require much for companies to convert from old practices to new greener ones. The question is, when the right to pollute is traded as a commodity, what happens to those who live in the area that is generating the most pollution? With a carbon trade, these companies are in effect legally polluting, with no compensation for people, animals, and plants that receive the brunt of the problem. Another point is that what prevents a polluting company from going off-shore to find a suitable area in which to release greenhouse gasses? If there is no cap elsewhere, what is to prevent a plant from being built and operated in, say, a third world company that can possibly benefit financially, even while suffering from the environmental consequences? (As we all are anyway!)
And then there is the problem of possible tax inflation that cap and trade transactions will generate, requiring more consultants and lawyers to determine management details. With a tax on carbon as an option, it seems that this would provide a less complex and more immediate solution to the devastation caused by greenhouse gas emissions by plants and factories. A carbon tax law is more difficult to manipulate by special interest groups and provides citizens with a more transparent means of understanding the methods behind tightening carbon pollution. Additionally a carbon tax provides greater predictability to energy prices.
The first step is in understanding the language and the policies. Then we as citizens can help decide what makes the most reasonable legislation for a cleaner world.
-Michele Kadison
