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The Cap-And-Trade System: A Case Study

402 Words2 Pages

There are two approaches the U.S. can use to control carbon emissions: Cap-and-Trade and carbon taxes. The Cap-and-Trade system is the control mechanism currently being used in America. With this system, the government issues a limited number of permits and distributes them to companies that emit air pollutants. These companies than has three choices: (1) reduce their emissions to be in compliance with the permit, (2) buy additional permits from other firms, or (3) pay fines for overages. The Cap-and-Trade system has been successful in controlling CO2 in coal burning power plants in America. But with other industries, the system has had mixed results due to monitoring difficulties. Other countries struggle to implement the Cap-and-Trade system as well. This is mostly due to unfair practices and governmental favoritism (McConnell, Brue, & Flynn, 2015, p. 103). …show more content…

This approach would lift restrictions from companies and simply tax the materials that contained carbon, such as a ton of coal, gallon of gasoline, or barrel of oil (McConnell, Brue, & Flynn, 2015, p. 103). The thought is by raising the cost of products containing pollutants it would reduce their demand in the marketplace. Proponents say this approach is more fair and harder to evade. There also would be no need for monitoring. I feel either way, the consumer is going to pay the price. With both approaches, companies will pass the cost onto the consumer. The market will be of no use in controlling the prices by regulated utility companies. The Public Utilities Commission will simply grant an increase in rates in order to insulate the utility from any

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