Will Carbon Trading Work?

Will Carbon Trading Work?

You don't have to be Al Gore to be concerned about carbon pollution's effect on our Earth. Scientists and world leaders are constantly considering new ways to reduce emissions, and some have proposed a process known as carbon trading, where companies are given carbon credits that they can either use for their own emission needs or sell to bigger polluters who need more credits. Is this the remedy for our ailing environment, or just a lot of hot air?

Next question in Society

  • “Yes”
  • No Objections Yet

International Emissions Trading Assoc

Cap-and-Trade Protects the Economy

International Emissions Trading Association

The second part of cap-and-trade -- trading -- provides covered entities with the freedom and flexibility to identify the most efficient, least cost means of reducing emissions. A well-designed emissions trading program will reduce costs for both consumers and businesses alike, and achieve the greatest emissions reductions for a given input of societal resources.

The United States invented emissions trading as a means to reduce acid rain while keeping electricity prices down. Under the 1990 Clean Air Act Amendments, the US required major reductions of the emissions which cause acid rain, SO2 and NOx, but allowed companies to trade in order to make it easier to reduce emissions. Most studies estimate the savings to be between $700 and $800 million per year -- for a savings of over 40%. Some studies estimate the savings were twice as high -- $1.6 billion per year.

When Congress was considering ratifying the Kyoto Protocol, the Congressional Research Service compiled 17 different estimates, by eight different organizations including the US government, of the costs of complying with the Protocol with and without trading. All 17 analyses estimated dramatically lower costs when trading was allowed. Cost estimates with no trading allowed ranged from $193 to $348 per ton. Trading within developed countries reduced these estimates to between $61 and $175 per ton, while global trading reduced the estimated prices to between $14 and $50 per ton of carbon.  The US Energy Information Administration estimated that partial trading would reduce US costs by 68%, and full trading by 88%. More recent analyses, such as the Stern Review on the Economics of Climate Change, draw similar conclusions.

Post a Comment

Next Argument Previous Next

Will Carbon Trading Work?

Loading
  • Yes
  • No
Vote
View Results

Ask Your Friends to Vote

Spotlight

Loading
  • The Climate Group
    The Climate Group is an independent, nonprofit organisation dedicated to advancing business and government leadership on climate change. We are based in the UK... More

Subscribe to Opposing News

Biweekly updates on new debates and experts

Loading
Thank you for signing up

Please check your email to confirm your subscription.