Can any of you explain what "Cap and Trade" actually means?

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phoenix

Member
It means the government will controll ANY business that uses energy. They will all have to pay tax to Al Gore, George Soros, and Obama.

It will bring about the end of capital investment in American business, and there will be almost total unemployment.
 
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JasonK

Member
And I don't mean editorial explanations like "It means killing jobs" or "Socialist Nazism". I'm looking for an objective description of what a Cap and Trade policy would do.

I see lots of people throwing the phrase around a lot these days, but I suspect none of them know what they are actually talking about when the say it.

So let's see who really knows there stuff. What does Cap and Trade actually do?
*their stuff

Please excuse the grammar/usage error.
 
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whiteflame55

New member
Alright, I'll do my best to explain it. Basically, Cap & Trade is a system by which companies are supposed to reduce carbon emissions. It's been tried before on a smaller scale with sulfur dioxide emissions to reduce the occurance of acid rain (which did work, but as I said, on a smaller scale). Cap & Trade functions by giving certain tradeable commodities to companies that reduce their carbon emissions, thus incentivizing the process by which they reduce them. These credits can be traded to companies with emissions above the cap to help them avoid tax issues. The disincentive comes through companies that retain high carbon emissions, since they will be taxed according to the excess. It's enacted over a long period of time, whereby the amount of emissions is gradually reduced to ensure that companies are able to keep up. In the cases of sulfur dioxide, this worked well because companies eventually started going well below the cap in order to gain more of these credits. It's uncertain when it comes to carbon because it is such a staple emission, practically every company emits some carbon, and it's difficult to shift away.

Hope that suffices.
 
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GodlessHeathen

New member
A company who adopt green technology or ecologically friendly policies can get a credit, if they make enough credits they can sell it to another company so that they can reach their quota. It's a means of trying to get companies to convert to green technology while providing a revenue stream. In the transportation industries, many companies have already converted to green technology and see this as an opportunity to generate money. It's all a cost benefit thing, will the cost of converting to green technology be covered by the increase in business and credits they sell. The University of Vermont is already trying to create a program that will create and industry standard for Cap & Trade for passenger transportation companies.
 
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scott

Member
The presumed goal of C&T is to lower CO2 emissions by Americas companies. This is supposed to be accomplished by capping every companies emissions to be X number of units (credits). Then they are going to set up an exchange to allow companies that exceed this cap to purchase more credits from companies that emit less than the cap. This effectively makes the government the "broker" and just like a stock broker will be taking a cut off of every trade. This is why many consider it a tax. Since the companies that emit the most CO2 are generally energy companies and oil refineries their costs of doing business will be going up and these costs are going to be passed on to the consumer. The goal of reducing emissions will not work because it will be much easier for the companies to raise prices than it will be to completely change their processes and equipment to actually reduce emissions.
 
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