Cap and Trade

Cap and trade (carbon trading) works by imposing a restriction on the amount of emissions that a power company, oil refinery, or other energy-intensive business may emit.  Companies are allotted permits for emissions over a specified time, and businesses that pollute less than their allotment can sell their unused permits to those that pollute more.

　

Carbon cap-and-trade programs are the foundation of many climate policy proposals. They continue to be a focus of global debate.  Key questions include:

• How will carbon credits be allocated?

• How restrictive should carbon caps be?
• Will there be rewards for early adopters?
• What level of emissions will be grandfathered?
• Should companies be rewarded for investments made years ago?

What Is the Problem with Carbon Trading?

1.    Fundamentally, pollution trading is wrong.  It treats clean air and public health as a private commodity to be traded, speculated against, and profited from. What once was a wrong—i.e., polluting—is now a "right".   Instead of people having the right to breathe free, businesses have the right to pollute as much as they can afford and make money while doing so.

　

2.     Cap and trade has not achieved CO2 emissions reductions.  Most countries participating in the Kyoto Protocol are failing to meet their target greenhouse gas emissions reductions. Canada has consistently failed to meet its Kyoto targets and currently exceeds greenhouse gas emission targets by about 25%.  The European Commission reported that emissions from the major industrial users throughout the European Union actually rose by 1% to 1.5% in 2006.

　

3.     Cap and trade is based on the trading of pollution generated from fossil fuels.  Therefore, with cap and trade, we continue to be dependent upon the very fuels that are causing the most harm.

　

4.     Carbon trading is difficult to monitor. It invites accounting fraud in a market where both the seller and the buyer have a shared interest in low quality products.  A 2007 Financial Times investigation uncovered widespread failings in markets for greenhouse gases, suggesting some organizations are paying for emissions reductions that do not take place.

　

5.     Polluting fossil-fuel plants, often located in low-income communities and communities of color, would continue to operate.  A cap and trade system would allow heavy polluters to buy credits from less polluting facilities.  There would be no incentive to close or clean up the heaviest polluting power or industrial plants in communities where health already is compromised by their presence.

　

6.     Time is of the essence!   The climate crisis is urgent.  We do not have the luxury of waiting while the myriad details of a cap-and-trade system are resolved through lengthy negotiations. 

　

There Is An Alternative!

Technologies and alternatives exist to reduce harmful greenhouse gas emissions without carbon trading.  Instead of cap and trade, we can:

　

1.     Have caps without trade.  We can cap emissions as a way to reduce CO2 pollution and encourage investment in wind, solar and geothermal energy.  We don't need to trade them.

　

2.     Invest in a clean energy economy.   This not only would achieve real reductions in emissions and bring about economic growth, but also would create green collar jobs that give rise to healthier communities as pollution-generating industries are phased out and affected populations (low-income and minority) are brought into the new economy.  Visit Repowering the Midwest and Green for All for examples of just how effective this strategy can be!

　

3      Penalize those who violate pollution regulations.   The Clean Air Act, as amended in 1990, gives the EPA authority to do just that. . 

　

4.     Implement a carbon tax to raise consumer demand for renewable energy, energy-efficient products and transportation systems. Such a tax also would make renewable energy more cost-competitive with coal, natural gas and oil, fossil fuels that are relatively inexpensive to use in today’s subsidized market.  Provide assistance for low-income households who already spend a disproportionate share of their income on energy.

　

5.     Change the Way We Use and View Resources.  Isn't it time we started to think about how we relate to our earth?  Continuing to rely on fossil fuels is not sustainable and is destroying our planet as will as harming people.   Pollution from industrial and power plants continues to cause illness for those who live next to such facilities, and exploitation of such resources causes displacement and war.

　

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