AP Photo/Charlie Riedel
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According to the EPA, "Cap and Trade" is a "market-based policy tool for protecting human health and the environment." Under such a plan, a strict emissions limit, or cap, is set and each source, be it a farm, factory, or some other industrial entity, is given an allowance permitting a certain amount of emissions below the cap. The trade comes into play when one source produces more emissions than they have been allotted. When this happens, over-emitting businesses can purchase unused credits from other companies.
The more popular approach to regulating emissions is a carbon tax, which charges companies based on the emissions they produce. The problem with a tax, most environmentalists argue, is that it does not mandate a limit. Wealthy companies are willing to pay a higher tax on emissions as long as it is cheaper then cutting them. A cap forces compliance with a limit and is, the argument goes, the only way to ensure a reduction in greenhouse gas emissions.
President-elect Barack Obama has proposed a "cap and trade" program to help reduce total emissions in the United States but passing such legislation through congress will not be easy. Besides the fact that many in Congress favor a tax, the recent economic downturn has swayed some who previously supported Obama's plan.
Missouri Senator Claire McCaskill, a longtime supporter of Barack Obama, is the most recent representative to express her concern over the cap and trade proposal. She stated that, while something must be done to control emissions, "we can't kill the business climate at the same time." She went on to argue that the cost of switching to cleaner alternatives will be born by the tax payer at a time in which people do not have the economic security to deal with such an increase.
Whether McCaskill's comments, which have been criticized by environmentalists, are unique or the sign of a trend in Congress remains to be seen. Still, the success of Obama's cap and trade proposal will be one of the first environmental challenges faced by the new administration.
Find out more about the latest environmental and political news on Focus Earth: December 13, 2008: Cap and Trade Delay & Obama's Green Team.
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