Why A National Carbon Cap And Trade Program Is Missing?

1756 Words May 6th, 2015 8 Pages
Kun Lou

Why a National Carbon Cap-and-Trade Program is Missing?

Cap-and-trade is a system designed to reduce emissions. Once a cap of certain emissions is set, companies are allowed to sell their unused portion to ones who exceed the cap. The feature of cap-and-trade is that instead of commanding companies how to reduce their emissions, it simply imposes a cap on emissions1. A company makes it own decision on how to use it allowance. Companies are rewarded by selling the left quota under the cap or they have to purchase extra allowance from the market.

Though the term 'cap-and-trade ' is mostly referred to efforts in reducing carbon emission, the initial idea of trading emissions was applied to SO2 emission control. During Regan administration from 1980 to 1988, 70 bills were written to address SO2 emission and acid rain control. However, such 'command-and-control ' policy was too costly to operate. It was not until 1989 the government proposed emission trading as a means of reducing SO2 emissions2. Cap-and-trade officially became part of Clean Air Act 19903. The result from this very first cap-and-trade initiative was very encouraging-3 million tons of acid rain emissions have been cut. With the recognition of climate change, cap-and-trade was proposed to be a solution to dealing with carbon emission.

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