Former U. S. Speaker of the House of Representatives Newt Gingrich and Massachusetts U. S. Senator John Kerry engaged in a public engagement on global warming in 2007. Part of their conversation focused on cap and trade. Listen to their discussion aired by Word for Word at:
http://wordforword.publicradio.org/programs/2007/04/13/
I am not an expert on cap and trade but it is a sound idea with regards to reducing global emissions, and one that the newly elected U. S. Senator from Massachusetts Scott Brown opposes. From his website:
Energy and Environment
I support common-sense environment policy that will help to reduce pollution and preserve our precious open spaces. I realize that without action now, future generations will be left to clean up the mess we leave. In order to reduce our dependence on foreign oil, I support reasonable and appropriate development of alternative energy sources such as wind, solar, nuclear, geothermal and improved hydroelectric facilities. I oppose a national cap and trade program because of the higher costs that families and businesses would incur.
As well according to WBUR.org cap and trade first came about successfully under a Republican Vice-President, George H. W. Bush, to address sulphur emissions which contribute to acid rain. Simply put cap and trade programs utilize free market principles. They monetize or place a dollar value on air and limit (cap) emissions. In other words, if someone wishes to pollute they must pay for it.
If implemented poor states or countries receive compensation for the negative impacts or externalities created by the, "first world," through trade allowances. To reduce pollution costs industry responds to cap and trade disincentives by adopting new or otherwise improving technologies that reduce emissions, which may in turn create new jobs. While it might be true cap and trade's costs are passed on to consumers in the shorter term it is also true over the longer term that a free market which does not block trades will find an equilibrium point that is efficient. At this point there is no market.
From Consumer Energy Report:
Cap-and-trade is a system whereby corporations would be capped in the amount of potentially harmful carbon emissions they can produce. Companies that are “over budget” in their emissions could purchase larger emission quantities from corporations that are under budget. Proponents of cap-and-trade claim that reform would limit damage that manufacturers could impart on the environment. Detractors counter that cap and trade is merely a stopgap measure that would merely drive up costs without having any significant effect at reducing emissions.
From the U. S. Environmental Protection Agency website:
Cap and trade is a market-based policy tool for protecting human health and the environment by controlling large amounts of emissions from a group of sources. A cap and trade program first sets an aggressive cap, or maximum limit, on emissions. Sources covered by the program then receive authorizations to emit in the form of emissions allowances, with the total amount of allowances limited by the cap. Each source can design its own compliance strategy to meet the overall reduction requirement, including the sale or purchase of allowances, installation of pollution controls, and implementation of efficiency measures, among other options. Individual control requirements are not specified under a cap and trade program, but each emission source must surrender allowances equal to its actual emissions in order to comply. Sources must also completely and accurately measure and report all emissions in a timely manner to guarantee that the overall cap is achieved.
A well-designed cap and trade program delivers:
- Greater environmental protection at lower cost
- Broad regional reductions, facilitating state efforts to address local impacts
- Early reductions, a result of allowance banking and market incentives
- Environmental integrity and transparent operations and results
- Fewer administrative costs to government and industry
- Efficiency and innovation incentives
- Incentives for doing better and consequences for doing worse
- Accounting for all emissions
- Partnership with existing requirements to ensure protection of the local population and environment
To learn more about cap and trade visit the U. S. Environmental Protection Agency at:
Clean Technica reports Reuters says cap and trade works in European Union
http://www.cleantechnica.com/2010/02/13/reuters-cap-and-trade-worked-in-eu/
