Here is a link to a great piece at Smithsonian regarding the political history of the SO2 trading program. My favorite part is G.H.W. Bush pushing for a bigger reduction (i.e. a tighter cap) because everyone understands that double-digits are important.
Here's a short blog post at the WP regarding Europe's program and a more recent post.
Here is a short piece from WRI regarding cap-and-trade in California.
The San Jose Mercury News has an informative piece on the nuts and bolts of California's system.
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The articles included on the post have me a little worried. In class, we learned all the economic benefits from cap-and-trade, making it appear like the perfect option. I have always backed emissions trading due its typical "phase-out" nature, but I did not know that it could make and save so much money. However, the articles make me a little worried since they highlight Europe's struggles with controlling carbon through cap-and-trade. I worry because I know the US will hesitate even more before creating a national tax or emissions trading program on carbon. Also, I noticed that the first Washington Post article notes a recent decline in carbon emissions in the US, despite national legislation. This detail does not seem very helpful in the argument for national and international control of carbon dioxide emissions and climate change. Have there been many economic studies on how much a carbon tax or cap-and-trade program could benefit our country?
The article on California bring to light the question, "How successful Cap and Trade is?" Reason, if big companies can buy credits from less carbon emitting companies at nominal fees then why should they not continue to spew carbon into the atmosphere?
The struggles with EU in Carbon emissions trade is a clear indication of the many challenges ahead with regard to Cap and Trade.
Shayvonne,
Cap and trade works to decrease total pollution by limiting allowable emissions (the cap) and also serves to foster innovation into new abatement technologies. Because firms can profit from abatement, we can expect cap and trade to produce more emissions reductions than a strict standard could ever achieve. So, the answer to your question "why should they not continue to emit carbon?" ... because it will be much more profitable for them to reduce emissions than to pollute. Yes indeed, there are challenges to implementing this system. All regulations will have challenges. Should we allow those challenges to stop what is clearly the most promising form of pollution control or should we learn from the challenges, adapt accordingly, and proceed?
So I know we talked about cap & trade in class a while ago, but I loved reading the Smithsonian article - the history of the things we study really helps put them in context for me.
I was wondering how cap and trade - or I guess "emissions trading" - was first presented to the US public when it was introduced in 1990. I went to the New York Times website and looked for articles from that year. At the bottom of this one about coal pollution they introduce the idea of "Trading in the Right to Pollute":
http://www.nytimes.com/1990/11/25/business/a-new-geography-for-the-coal-industry.html?pagewanted=all&src=pm
A lot of uncertainty in this article, since it was just being proposed. Hmm.
Also, it is worth examining the fact that although cap and trade was insanely successful for us with acid raid in the 90s, it is a troubled, inefficient system for current carbon emissions in Europe. Planning how the system rolls out seems immensely important - after all, it took the US a LOT of bickering back and forth to figure out a system that would be effective.
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