Environment and Energy
Debate over Cap and Trade
With the introduction of the draft Waxman-Markey American Clean Energy and Security Act of 2009 this May, the national debate over energy policy is heating up. The most contentious issue is the proposed cap and trade program for greenhouse gas emissions.
Cap and trade programs work by setting an upper limit (or cap) on the total emission of the substance in question, and then rationing out emission credits based on a formula up to the cap. In the case of greenhouse gas, utility companies and manufacturers that emit CO2 would be allowed emissioncredits up the cap. Companies or utilities that are able to reduce their emissions and can sell unused credits, effectively creating a market for emissions. The upper cap would be ratcheted down over time.
The US Chamber has detailed their concerns with the Waxman-Markey proposal. The Heritage Foundation has issued a blanket warning about all cap and trade programs fearing that they "would likely increase energy costs and do considerably more economic harm than environmental good." A Wall Street Journal editorial from earlier this year declared: "Cap and trade is the tax that dare not speak its name."
Here are other resources to help bring you up-to-speed on Cap and Trade:
- US EPA - Climate Change Economic Analysis
- Pew Center on Global Climate Change
- Brookings Institute - Climate and Energy Economics
Look for more posts about this issue on the Policy Clearinghouse Blog. Also, plan to sit in on the "Energy: Renewables, Mandates and the New Economy" workshop at the ACCE Convention in Raleigh.