Will cap and trade work?

[zach]

I was listening to a story on NPR about this topic a while back. I know some countries in the EU have already started using cap and trade. Some people think it works and others see it as just another way for traders to make money off of a commodity. What's your take?

[shiela_robins]

Looks like it is a money-making scheme. It doesn't give much incentive for companies to work hard not to go over the cap. They can easily buy it from another. Which countries in EU are doing the cap & trade system by the way?

[doubletrouble678]

Hi, everybody. I took a 'Modern Scholar' audio course on Global Warming not too long ago. It was lectured by a Harvard specialist in atmospheric sciences. His debrief in where the Cap n Trade system came from (last minute. 'let's end the meeting and talk this later' proposal by the USA Gov't in the closing days of the Clinton Administration) and how certain governments took it seriously while others (i.e. Bush) did not, was most revealing. The case history on how the CFC issue was successfully dealt with was another. I heard an NPR report recently about how European companies cap in thier homelands so that they can pollute in China. So, the system isn't perfect. I recommend this material to everyone who has time to investigate it. This is a big issue and voters need to make thier wishes known so that governments can take more bold action.

[longcall911]

I'm generally in favor of the cap part, and generally opposed to the trade part. If I cut my emissions by 10% then sell them, and the recipient outputs what I saved, where is the net gain?

[zach]

Originally Posted by longcall911

I'm generally in favor of the cap part, and generally opposed to the trade part. If I cut my emissions by 10% then sell them, and the recipient outputs what I saved, where is the net gain?

I completely agree. I guess a benefit could be that it gives companies an incentive to cut their emissions because they can sell that extra 10% and it puts a real $ cost on companies that have to buy that 10% extra when they go over their cap. I keep flip flopping on this issue. If done right it might work, as they decrease the supply (lower the cap) basic economics tells you that it should get more costly for companies and it might make sense for them to start considering reducing their emissions instead of buying credits.