CAP AND TRADE

Cap and Trade

Cap and Trade

Introduction

Cap and trade is an environmental policy instrument that delivers results with a mandatory emissions limit of emission sources, while providing flexibility in how they are met. Top of success and commercial programs offer strict accountability of the environment, without inhibiting economic growth, and reward innovation, efficiency and early action.

The first approach sets an overall cap, or maximum amount of emissions per compliance period, for all sources under the program. Authorizations to emit in the form of allowances allocated to affected sources, and the total number of allowances can not exceed the CAP. The monitoring requirements are not specified the sources, however, the sources report all emissions and surrender the number of allowances equal to the end of the compliance period.

Trading allows sources to design its own compliance strategy partly on the basis of their individual circumstances while continuing to achieve global emissions reductions required by the CAP. The affected units can tailor their compliance plans for each source.

Strategies in well-designed fulfillment of the CAP and trade programs do not require prior approval, to allow sources to respond rapidly to market conditions and government regulators to keep the focus on results. The sources also must accurately measure and report all emissions in a timely manner to ensure that the overall cap is reached.

CAP and Trade Application

In the experience of the EPA, the cap and trade programs have proven very successful in the context of those who are best suited: reduction of emissions at regional or higher from multiple sources that a detailed account of the costs of control. While achieving significant reductions on a regional scale, cap and trade programs can provide substantial improvements in air quality. As effective as these programs are, however, can not be the solution to every problem. For example, the elimination of localized concentrations of pollution is not their primary purpose.

The cap and trade approach is best used when:

• The environment and / or public health problem occurs in a relatively large area;

• A significant number of sources are responsible for the problem;

• The cost of controls varies from source to source, and

• Emissions can be consistent and accurate measurement.

In appropriate circumstances, cap and trade programs have proven extremely useful and substantial emission reductions, full accountability and unprecedented data quality and access. Existing CAP and trade programs - the Acid Rain Program and the NOx Budget Program - have the force of federal and state standards behind them, including national health-based air quality standards. This ensures that local public health needs are met in relation to achieving emissions reductions regional or national.

House Speaker Nancy Pelosi, has cap-and-trade legislation in a forced march through the House and the bill can get a full vote as soon as Friday. It seems as though the Democrats will destroy the discipline of economics to do so.

Despite the House Energy and Commerce payments many, Henry Waxman to Members, rural and Blue Dog Democrats remain wary of voting for a bill that would impose crushing costs ...