Cap and Trade Enviromental Legislature.

The 1,200 page Cap and Trade bill, was passed on June 26, 2009 and hasn't stopped causing controversy since. However, before I discuss the controversy and the arguments of both sides we need to understand, what, exactly, is Cap and Trade? The purpose of the bill is to steadily reduce economic pollution in a cost effective way. Sounds like a good idea so far, so lets break it down. The cap part of the cap and trade is a limit on the amount of green house gasses a large scale emitter or company can emit. The business must have a permit for every ton of pollutants it emits. Over time the limits, or caps, these permits set become stricter and stricter. Reducing pollutants until the ultimate level is met. Only certain number of permits will be issued. Similar systems have worked in the past, the Clean Air Act of 1990 is a good example, it lowered sulfur emissions that cause acid rain and met its goal for a lower cost then anyone predicted.

Now for the trade half of the bill. Quite simply any company who emits less then their permits allow them can sell the extra permits to less efficient companies. Ideally this creates a system that guarantees an overall reduction while rewarding the more efficient companies and meeting the cap at the lowest possible cost. The government profits from this by auctioning off these permits to create a large and reliable revenue stream.

Your probably wondering, if the system is that good then why is it so controversial? Well The Barr Code said it better then I could have so let me try and summarize. Basically the controversy is based on several things.

1. The polluters can go over the permits limit if they buy two billion carbon offsets. These offsets can be purchased from within America, or other places in the world.

2. Utility companies would be forced to purchase more and more of their energy from renewable resources. They may do this by forcing their customers, families and companies alike, to reduce their energy usage by changing building codes in order to use less energy, change lighting systems employed in homes and outdoor areas, and buy more expensive “energy-efficient” appliances.

3. The system failed in Europe.

4. The cost is expected to be in the Trillions of dollars.

That's barely scratching the surface but I believe you get the idea. If regulated properly and generally accepted and adhered to the Cap and Trade system would be an environmental and economical god-send. Unfortunately things this big rarely work in an ideal manner, especially when politics get involved.