Cap and Trade - Essay Example

Cap and Trade The Cap and Trade has been enforced by most of the nations on industries so as to check and bring under control the level of harmful atmospheric pollutants like carbon dioxide, which results in accumulation of greenhouse gases. (www.wisegeek.com ) Who proposed it, is it in effect now? The Cap and Trade system had its origins in the United States of America, when a lawyer by name Boyden Gray first proposed it as an effective mechanism, to control the emissions from the various industries across the country. Ever since this most of the nations across the world have adopted this Cap and Trade method, for controlling the pollution in their respective countries. (www.smithsonianmag.com ) What are the various elements of the law, who is the law aimed at, and how it will affect business in America and how will it affect each one of us? The various elements of the law are listed below. As per the Cap and Trade law each entity has got a limit to the amount of emissions it can emit, which is set in the form of tons. Because of this the emission to the environment can be easily measured and traded in the pollution market. (www.edf.org ) Another element of the Cap and Trade law, allows the buyers and sellers of the allowances to trade internally. Entities are also given the power to bank the allowance which is not used for future use. (www.edf.org ) The system also makes it mandatory that, each entity has to be very much truthful regarding the number of allowances that it holds and the number of tons that it had emitted to the atmosphere which should be equal after a given period of time. (www.edf.org ) The entities are also given the power to decide the exact location, the point of time and the method by which, they will reduce the emissions to the atmosphere. Thus this law is totally aimed at the industries, which are considered as the main contributors of atmospheric pollution in America. The business establishments in America will surely be affected by such a law, since it will put a curb to the level of pollutants they can emit. This could in turn affect the production output of such industries and automobile sector because they need to pay higher, for buying allowances. This could very well result in an increase in the prices of consumer products. There are those in favor of the law and those against it. What are the various positions with respect to Cap and Trade? The American government is the one who is in favor of the Cap and Trade law, since it will be another way to get money from the general American public and the industrial sectors. (www.washingtonpost.com ) There have been many sectors in the American industry, which are against the Cap and Trade system and these are mainly the Oil refining sector and Trucking industry along with the utilities sector, which will mainly face the brunt of this law. (www.environmentalleader.com ) American consumers will have to pay more for the consumption of the electricity for heating, lighting purposes and also for the consumer goods. (www.carbontax.org ) Does either side have a more compelling argument to the proposed cap and trade bill? If there are other laws, what are they? The US government on its part contends that the Cap and Trade bill will make it possible, to bring down the level of atmospheric pollution across American cities by controlling the emission of greenhouse gases from vehicles and industries, which could otherwise pose a major threat to the current and the future American generations. But the various industrial sectors across the US and in more particular the American public feel that, it would result in rise of prices for consumer products and the various utilities. (www.washingtonpost.com ) Apart from the Cap and Trade there are other laws like the American Clean Energy and Security Act or the Waxman- Markey Bill of 2009, which is similar to the Cap and Trade. (www.processor.com ) Have any other countries around the world enacted laws similar to Cap and Trade? Countries that have enacted laws, which are very much similar to the Cap and Trade, are India, South Africa, Japan, South Korea, Australia, Taiwan, Switzerland, New Zealand, Sweden, Norway, Italy, Denmark, UK, Finland, Netherlands, Germany, Canada and Switzerland. (www.menzieshouse.com ) What has been the effect of those laws? The carbon tax laws that have been imposed by most of the countries in the world; have been able to effectively render predictability in the case of prices for emissions. The tax payers get very good rebates based on the level of emissions and manipulations have been brought under control. (www.energyadvantage.com ) Because of the enactment of such laws, green house gases emissions have come down drastically across these countries. (www.theshalomcenter.org ) The carbon tax has lead to emission trading, since it has effectively controlled emissions across most of the countries where it has been implemented. (www.ceda.com.au ) Are you personally in favor of Cap and Trade, now that you have found out about the proposed law? Why or Why not? I am personally in favor of Cap and Trade to a certain extent. The greatest advantage is that, the level of greenhouse emission levels across the world would come down drastically with its effective implementation and this could prove to be quite beneficial to the environment and mankind. The greatest disadvantage is that the general public and industries will have to face the brunt of such law, since they will have to pay much more for the consumer products and for the utilities. Works Cited: Smith “What is Cap and Trade” www.wisegeek.com April09. 2011. Web. May05. 2011 Conniff Richard, Smithsonian magazine “The Political History of Cap and Trade” www.smithsonianmag.com August. 2009. Web. May05. 2011 Environment Defense Fund “The Cap and Trade Success Story” www.edf.org May26. 2009. Web. May05. 2011 Environmental Leader, Environmental and Energy Management News “Criticism Ramps Up Against Cap-And-Trade Systems www.environmentalleader.com June11. 2009. Web. May05. 2011 Shapiro Robert “Carbon Tax Vs Cap trade” www.carbontax.org April. 2009. Web. May05. 2011 Feldstein Martin “Cap-and-Trade: All Cost, No Benefit” www.washingtonpost.com June01. 2009. Web. May05. 2011 Testa Mintz Bridget “American Clean Energy & Security Act Of 2009”, “Electricity Rates Will Rise, But Owners Can Control Costs”, Vol.31 Issue20 Page(s) 34 www.processor.com July31. 2009. Web. May05. 2011 IIjazi Amir “Cap and Trade: An American Obituary” www.menzieshouse.com.au March21. 2011. Web. May05. 2011 Waskow Arthur Rabbi “Carbon Tax: Crucial Step to Stop Global Scorching” www.theshalomcente.org January28. 2007. Web. May05. 2011 Rowles Peter “Financial Mechanism to Reduce Carbon Emissions” www.energyadvantage.com March04. 2010. Web. May05. 2011 Byers David “Carbon tax is obviously better option” www.ceda.com.au March01. 2010. Web. May05. 2011iently and equitably Read More