Cap-and-Trade - Assignment Example

Cap-and-Trade The world governments have been trying to put in place measures meant to conserve the environment. These measures are meant to conserve the environment by trying to reduce the emissions of harmful gases in to the earth’s atmosphere (Burney, 2010). The two primary approaches that have been brought forward include the carbon tax approach and the cap-and-trade approach. This paper will focus on these two approaches and the major differences between them.Cap and trade approach is a pollution control system whereby the economic gains are established so as to limit the emission of harmful gases and other pollutants in to the environment.

This approach is based on credits which are issued to corporations by governments or a set authority. A corporation is issued with a set limit of the pollution level that they can cause in a given region. If it can achieve that, they can transfer their credits to another company for a given fee (Burney, 2010). Therefore, cap and trade approach creates a marketing system for those companies that are better or are able to reduce their emissions and at the same time is punishes those companies that can not be able to do so financially.

On the other hand, carbon tax is a tax imposed on carbon fuels. This approach offers corporations and governments a cost effective way of reducing greenhouse emissions in to the atmosphere. Carbon tax approach is mostly applied in OECD countries based on energy products and motor vehicles (Burney, 2010). There has been increased opposition to this approach citing concerns that it can lead to firms relocating and people losing jobs.On cap and trade approach, there are no emissions costs but the influence is on the broader economy.

Therefore, this approach favors the corporations. That means that whenever anyone at a personal level does any mistake he or she will not be involved. On the other hand carbon emissions are always monitored by the carbon in the fuel (Burney, 2010). I also find that very far fetched because homesteads emit as much greenhouse gases as corporations. Therefore, in my opinion I believe these measures are not enough to combat climate change ReferencesBurney, N. (2010). Carbon Tax and Cap-and-Trade Tools: Market-based Approaches for Controlling Greenhouse Gases.

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