Cap and Trade One Solution to Climate Change Essay

Cap and Trade: One Solution to Climate Change The threat of climate change in recent years is recognized as a real and potentially catastrophic threat to the health and welfare of our planet, as industrialized nations continue to run their economies by burning carbon into the atmosphere. Recently, it has taken on a larger role in our national media, the public, and the government, as the effects of anthropogenic climate change become more evident. In the United States, for example, the year 2007 brought the first major piece of legislation in the country to address the problem under the Climate Security Act, and the United States Supreme Court ruled that the U.S. Environmental Protection Agency had authority to regulate carbon dioxide as†¦show more content†¦At the end of the fixed compliance period set by policy makers, each source surrenders allowances. In theory, those who reduce emissions most cheaply will do so at the lowest cost to society (US EPA). For example, there are two companies that pollute. â€Å"Company A† can reduce their emissions cheaply and easily, but at first has little incentive to do so. â€Å"Company B† on the other hand cannot easily reduce their emissions, so they initially do not. Under a cap and trade system, both companies are allotted a certain amount of emissions permits. Because â€Å"Company A† can reduce their emissions more easily, they can sell their extra emission permits to â€Å"Company B† who may pollute more than their emissions permits allow. Overtime, the amount of emissions allowed for an emissions permit is reduced, which decreases the cost of innovation while increasing the cost to pollute, encouraging energy efficiency. Cap and trade often gets confused with two similar policy methods, command and control and environmental taxes, whose goals are similar, but whose means of reaching those goals are different. First, under command and control legislation, for ex ample, the government sets a cap on emissions and simply penalizes anybody who does not meet set standardized goals, without any trading component. Command and control is better for more local health issues, since implementing command andShow MoreRelatedWhy Cap And Trade Is A Better Solution857 Words   |  4 Pagesargued that carbon tax is the less complex and better guarantee solution to carbon reduction; however, the main purpose of this paper is to rebut his argument and to present why Cap-and-Trade is a better solution compare to other solution in controlling variables, ensuring social justice and last expanding global regulation on carbon dioxide. In which how cap and trade can reduce carbon emission and save the earth from climate change becomes the fundamental question. 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