Uncle Max's Musings on Politics and Culture

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Climate Change Update: Cap and Trade vs. Carbon Tax December 7, 2009

Filed under: Environment — Larry E. Stuckey II @ 4:24 am

As the world attempts to move to a green economy, governments have proposed several measures to accomplish this feat.  Two such months are implementing a cap and trade system and/or imposing a carbon tax.  Before I link articles that discuss further, let’s provide some definitions:

What is a cap and trade system? Per the Environmental Protection Agency, cap and trade is an environmental policy tool that delivers results with a mandatory cap on emissions while providing sources flexibility in how they comply.  Facilities that come in under that allowable limit because of air pollution control systems can then sell their leftover allowances to other facilities and organizations on the open market.  This trading allows the facilities that buy-up such allowances (pollution credits) to pollute more, because other facilities are polluting less.  A criticism of this system is that it yields more pollution in different areas of the country.  This year the House passed a bill for such an initiative. 

What is a carbon tax?  This item states what it simply is – a tax on carbon emissions.  A carbon tax is an environmental tax on emissions of carbon dioxide. Carbon dioxide is a heat-trapping “greenhouse” gas. The purpose of a carbon tax is to protect the environment by reducing emissions of carbon dioxide, helping to mitigate climate change.

James Hansen, considered one of the grandfather’s of climate change since, asserts quite strongly that we must go the route of a carbon tax, “We are going to have to move beyond fossil fuels at some point. Why continue to stretch it out longer?” he said. “The only way we can do that is by putting a price on carbon emissions. The business community and the public need to understand that there will be a gradually increasing price on carbon emissions.”


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