After the Kyoto Conference (which the U.S. did not attend), one of the most proposed means to help stop global warming has been the cap and trade system. The U.S. has come up with two proposals that consist of this system: the Climate Stewardship Act and the Regional Greenhouse Gas Initiative. Is this the best first step for our country to stop the climate crisis?
First of all, the cap and trade system is basically a simple, and theoretically brilliant initiative that involves a cap to greenhouse emissions and a trade system to trade extra emissions, hence the name cap and trade. The cap is set at a level lower than today's emissions (the 2005 emissions is the benchmark for most proposals). This cap is set to power companies and factories to make sure they are not over polluting the air. And then every year (or other amount of time), the cap will be lowered. By the year 2030, the amount of emissions would be reduced by 44% what is expected to be emitted, taking into account growth and such. (This would be 35% below the 2005 level). The trade system that will be started will include a company that has emitted far less than the limit, and wishes to make some money out of it. Other companies who will not meet the amount will have to buy emissions from another company. This is a good idea in theory, because companies would try to get far below the emission line so that they can make a little dough.
However, many arguments are coming out recently against this plan. For example, Robert Samuelson wrote a piece in the June 9, 2008 edition of NEWSWEEK (http://www.newsweek.com/id/139454) saying that this plan would never work. The argument goes something like this:
If this system would be instituted, companies that don't meet the requirement are going to have to buy more emissions. This, therefore, will make these companies increase their prices for the products they supply. This is mainly energy, because most of these factories will be power plants. Who will be on the blunt end of the stick here? The consumer. More specifically, the low-end of the socio-economic spectrum. They will be forced to pay higher prices for energy, and most would not be able to pay the electricity bill and would end up being screwed over. Then, as the carbon levels get lower, the amount of companies selling emissions would keep getting smaller and smaller, and the government would decide who gets to buy these emissions. This would create a lobbyist frenzy in the White House that would lead to way too much power being in the hands of money-laundering politicians, who we all know exist very readily in Washington.
But I have a hard time believing this argument because of one thing. This argument would be 100% true under one condition: no company does any research to reduce emissions. Then fewer companies will be below their emission level every time. However, using American ingenuity, new resources will readily come to the surface as the demand for them increases heavily. This will, in turn, lower the levels of carbon emissions, lower the level of companies needing to buy more allowances, stimulate the economy as energy becomes more cheap and help the environment. All in one package! Now I'm not a blind-sided optimist and I realize that this is all actually not going to happen. This will work, but it will not be the save all that politicians like John McCain, Barack Obama and Hillary Clinton hope it will be. However, I do believe that this is a great start in the right direction. If we can get politicians to sway slightly towards the environmental cause, the next step will be larger, but easier to get the politicians to go to, until our world is free from the fear of global catastrophe.
