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?

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International Emissions Trading Assoc

Cap-and-Trade Provides the Flexibility to Address Competitiveness

International Emissions Trading Association

Domestic competitiveness and emissions "leakage" -- in which a company simply shifts emissions overseas rather than reducing them -- are a significant concern when designing any emissions reduction program. Poorly designed or inherently inflexible policies run the risk of driving production offshore to jurisdictions that do not have an absolute carbon cap -- costing American jobs while producing no net greenhouse gas abatement. A cap-and-trade system can use a carefully designed allocation process to mitigate emissions and investment leakage on sectors that face international competition. Granting an allocation to trade-exposed industries unable to pass through their allowance costs minimizes distributive impacts while still allowing these industries to operate under a carbon constraint. 

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Will Carbon Trading Work?

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    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

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