Can Someone Explain Cap and Trade? (conversion, companies, tax, cost)

[user_id]

These sorts of systems are the free market solution to trying to get businesses to reduce their emissions. Its surprising that there is so much opposition to it, but big businesses often uses fear to get the people to reject things that they don't like.

The house included a part that would force tariffs on countries that did not also reduce their emissions starting I believe in 2020. The WTO appears to agree that such moves are not violations. The tariffs can be removed in some cases, but only with the approval of congress.

[floridasandy]

Originally Posted by mwruckman

Cap and Trade is a system to assign a cost to the emission of carbon into the environment and ultimately reduce the emission of carbon in the form of the greeenhouse gas CO2. The idea is to reduce global CO2 emission to the level that matches the Earth's capacity to recycle it in forms that are not gaseous. This will stablize the amount of CO2 in the atmosphere and hence the climate. I like to think of cap and trade as being like sanitation. Several hundred years ago most people dumped their sewage in the streets, on their crops or in rivers and ponds. This had real impacts on personal comfort, public health and life expectancy. To end these practices the public was taxed to build sewers and sewage treatment plants. You were required by law to use these new facilities and you had to pay for them. If you wanted to you could build private facilities to process and take care of your sewage. Now there is no economic cost involved in CO2 emission and utilities actually benefit from doing so. Why do you think that coal burning accounts for 60% of our electric power generation. Coal is the cheapest power source. We need to encourage either the modification of these coal plants to reduce CO2 emissions or switch to power sources that do not produce CO2 in the first place. In otherwords connect these power plants to a CO2 sewer system or switch to solar, wind, hydro or nuclear pwer. The same logic applies to cars and trucks or trains. The problem is how to pay for this and how to make the cost of current carbon-rich sources reflect the cost to remediate them and cope with the damage climate change will do to the nation in the next century. Coping with this damage may include replanting dead forests in the Pacific NW and Eastern US, building sea walls around some costal cities, replacing cities and towns that have to be abandonned by flooding, building aquaducts to the Southern and SW US or replacing cities and towns abandonned due to lack of water. The idea is to give emitters of CO2 credits or permits to emit this gas. These credits will be less than the amount of CO2 they emit and will decrease over time (the cap part). They will have to use technology or change their process to reduce CO2 emissions. Failing that they will need to buy credits (the trade part) from other companies or organizations that have reduced CO2 emissions and have extra credits. The market will set the value of these credits. Eventually the government will sell all the credits. Failure to comply will be unlawful just like what would happen if you ran a pipe from your toilet to the street and let the sewage flow to a storm drain.

of course, it doesn't actually work because there are problems. This scheme appears to globalize pollution through trading, buying, and selling. The end result is that polluters will continue to pollute and buy from a long list of those who have real or fake pollution credits to sell. It is a great idea for those special corporate interests that established this money making market scheme because they will make fantastic profits…but it does not regulate or reduce the pollution that is responsible for climate change and the polluting of our air, rivers, and streams.

The “cap and trade” plan has other huge drawbacks. It fails to finance the technology that will help industry and all of us to reduce pollution. The American people are being sold a bill of goods that isn’t worth the paper it is printed on. What we fail to grasp is a “crisis” has been generated in order to get us to buy into enormous money market schemes called “caps and trades,” questionable experimental geoengineering schemes, experimental weather modification programs, and a questionable plan for carbon sequestration, but using very real future american earnings to finance it.

[sunsprit]

Originally Posted by mwruckman

Cap and Trade is a system to assign a cost to the emission of carbon into the environment and ultimately reduce the emission of carbon in the form of the greeenhouse gas CO2. The idea is to reduce global CO2 emission to the level that matches the Earth's capacity to recycle it in forms that are not gaseous. This will stablize the amount of CO2 in the atmosphere and hence the climate. I like to think of cap and trade as being like sanitation. Several hundred years ago most people dumped their sewage in the streets, on their crops or in rivers and ponds. This had real impacts on personal comfort, public health and life expectancy. To end these practices the public was taxed to build sewers and sewage treatment plants. You were required by law to use these new facilities and you had to pay for them. If you wanted to you could build private facilities to process and take care of your sewage. Now there is no economic cost involved in CO2 emission and utilities actually benefit from doing so. Why do you think that coal burning accounts for 60% of our electric power generation. Coal is the cheapest power source. We need to encourage either the modification of these coal plants to reduce CO2 emissions or switch to power sources that do not produce CO2 in the first place. In otherwords connect these power plants to a CO2 sewer system or switch to solar, wind, hydro or nuclear pwer. The same logic applies to cars and trucks or trains. The problem is how to pay for this and how to make the cost of current carbon-rich sources reflect the cost to remediate them and cope with the damage climate change will do to the nation in the next century. Coping with this damage may include replanting dead forests in the Pacific NW and Eastern US, building sea walls around some costal cities, replacing cities and towns that have to be abandonned by flooding, building aquaducts to the Southern and SW US or replacing cities and towns abandonned due to lack of water. The idea is to give emitters of CO2 credits or permits to emit this gas. These credits will be less than the amount of CO2 they emit and will decrease over time (the cap part). They will have to use technology or change their process to reduce CO2 emissions. Failing that they will need to buy credits (the trade part) from other companies or organizations that have reduced CO2 emissions and have extra credits. The market will set the value of these credits. Eventually the government will sell all the credits. Failure to comply will be unlawful just like what would happen if you ran a pipe from your toilet to the street and let the sewage flow to a storm drain.

False analogy to "sewer systems". When the people were taxed to create sanitation systems, there was a transfer of people's money to a working sanitation system, whose need was demonstrable for health and safety reasons.

When money is collected in the "cap and trade" system, most of it goes to energy/carbon speculators, not to the benefit of the energy consumers, and not to pay for the intended reduction of greenhouse CO2 production.

Further, the "cap and trade" bill, as passed by the House, has a provision that anybody earning less than 150% of the Fed poverty income will receive a direct deposit amount each month in the sum of what the Fed calculates the adverse impact upon their energy consumption costs. So the majority of the population not only gets to pay for their own energy consumption "cap and trade" cost, but also that of the folks living on a low income. That's a double taxation from the start of the program.

What's especially egregrious about the "cap and trade" system is that the USA is imposing this upon itself, without a corresponding reduction of carbon emissions from the world's largest (or soon to be) polluters ... China & India. So the USA population gets to pay a lot more for energy without a direct benefit, which makes the economics of manufacturing and any other energy consuming industry (food, products, etc) more favorable in the countries where it's not so burdened. Say goodbye to USA industry when it's more cost effective to produce elsewhere in more favorable and lower cost nations.

[HappyTexan]

So if they are now making an industry out of pollution, what is the incentive to lower it ?
To capitalize on it you'd have to increase it.

Do these companies want to see pollution and emissions lowered to the point where they close shop because they are not needed anymore ?

Science and politics don't mix folks.

[floridasandy]

What's especially egregrious about the "cap and trade" system is that the USA is imposing this upon itself, without a corresponding reduction of carbon emissions from the world's largest (or soon to be) polluters ... China & India. So the USA population gets to pay a lot more for energy without a direct benefit, which makes the economics of manufacturing and any other energy consuming industry (food, products, etc) more favorable in the countries where it's not so burdened. Say goodbye to USA industry when it's more cost effective to produce elsewhere in more favorable and lower cost nations.

excellent point! people need to realize that it is not just paying more for all of their energy with an ENERGY TAX but that it will be hurting american manufacturing at the same time that it helps out our competitors. (especially china). our competitors in the global market are ramping up their own production on the backs of american taxpayers.

[Philip T]

Of course, on the personal level, or small business level, one could choose to go off carbon, avoid all the fees, etc., and enjoy lower costs than the starting point and have a higher quality of life.

This is about as hard to figure out as stopping smoking.

[8 SNAKE]

Sunsprit - I can't rep you right now, but that was a phenomenal post.

[sunsprit]

Originally Posted by Philip T

Of course, on the personal level, or small business level, one could choose to go off carbon, avoid all the fees, etc., and enjoy lower costs than the starting point and have a higher quality of life.

This is about as hard to figure out as stopping smoking.

Oh, really? HOW?

With subsidized alternative power sources that are far more expensive per KWH produced?

With alternative fuels (such as ethanol) that cost more to produce than the product they're replacing?

And how do you equate "clean energy" of no CO2 production with a "higher quality of life"? Because you "feel better" somehow? and you need to impose that approach on everybody else by creating exhorbitant tax systems that only benefit wealthy investors/traders?

Bad analogy to smoking ... proven adverse health effects from the inhalation of the toxic substances. Not proven that CO2 from fossil fuels is creating excess greenhouse gas resulting in "global warming". For those of you who haven't noticed, "global warming" appears to have taken a vacation for the last decade.

I'd bet that if the USA (magically) stopped producing all CO2 tomorrow, that the balance of the CO2 in the atmosphere wouldn't shift a minute fraction of a percent .... although the "greenies" would be thrilled in such a scenario, especially if it destroyed the economy of the country. Oh, wait a minute ... that's what they're trying to do now, isn't it?

[Philip T]

Originally Posted by sunsprit

Oh, really? HOW?

With subsidized alternative power sources that are far more expensive per KWH produced?

With alternative fuels (such as ethanol) that cost more to produce than the product they're replacing?

And how do you equate "clean energy" of no CO2 production with a "higher quality of life"? Because you "feel better" somehow? and you need to impose that approach on everybody else by creating exhorbitant tax systems that only benefit wealthy investors/traders?

Bad analogy to smoking ... proven adverse health effects from the inhalation of the toxic substances. Not proven that CO2 from fossil fuels is creating excess greenhouse gas resulting in "global warming". For those of you who haven't noticed, "global warming" appears to have taken a vacation for the last decade.

I'd bet that if the USA (magically) stopped producing all CO2 tomorrow, that the balance of the CO2 in the atmosphere wouldn't shift a minute fraction of a percent .... although the "greenies" would be thrilled in such a scenario, especially if it destroyed the economy of the country. Oh, wait a minute ... that's what they're trying to do now, isn't it?

Looks like you have a whole field strawmen to argue with on that one post.

And it looks like you are familiar with the concept with that many examples, but for those who are not . . . .

Straw man - Wikipedia, the free encyclopedia

Hard to guess if you are seeking an intelligent discussion or just seeking to argue? If the latter, I would recommend therapy. If sincere, a large start would be begin taking US off of oil for transportation.

Transportation is the largest sector of oil consumption in the US. In particular off of oil for ground transportation by transitioning to grid powered electric. That covers autos, trucks, trains, high speed rail -- however, commercial aircraft and airlines, in the long run are probably screwed.

And before you go back into goofy strawman rants, you did not hear me say Solar PV, batteries, nor nukes.

As far as subsidies -- none are really needed. Just stop subsidizing and enabling the current polluting carbon based systems (oil, coal, etc.) and they would cease over time.

For my part I do not argue CO2 either way. It is just that Oil and Coal are bad business, and dirty no matter what we do.

[Nepenthe]

Originally Posted by Philip T

Of course, on the personal level one could choose to go off carbon...

I'll get right on that.