The Cap And Trade Program

817 Words Mar 29th, 2016 4 Pages
A cap-and-trade program sets a maximum level of pollution, and distributes emission permits among firms that produce emissions (Carbon Tax, 2013). The purpose of which is regulation of specific emissions by stationary and mobile sources, and setting a specific level which all emitters are re-quired to meet. Cap-and-trade possibly has less of a direct economic component to it than the other alternatives to reducing emissions described due to the ability to trade permits versus the expendi-ture of resources improving technology, with some arguing it is to the detriment of the environment. As stated in the article found in Reclaiming the Environmental Agenda, by Ashford, N. et al., 2008, “being a market-based instrument, ‘the cap-and-trade option suggests that at least this form of MBI may be more environmentally effective than the usual command-and-control alternatives, in addition to being more economically efficient.” (Ashford, N. and Caldart, C., 2008, p. 908). Charles Frank states in his article, at least with cap-and-trade “it sets the allowable quantity of emissions and has the advantage of making clear, through a market price for emissions, the actual costs of a stipulated quantity of reductions” (Frank, C., 2014). This could be viewed as a way to at least know what amount of emission should be expected depending on the emitter, therefore being better able to be controlled. It could be said that it is harder to administer cap-and-trade because the EPA must set…
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