Cap and Trade 101

Cap and Trade is a market based policy tool, which sets a cap on the amount of emissions from a group of sources with the end goal of reducing the overall pollution in a nation, region, or industry.

The intention is to incentivize a reduction in emissions and penalize those who don’t comply. Participants in Cap and Trade receive allowances and can design their own compliance strategy giving them flexibility to sell and purchase emissions, in addition to other methods in order to comply with total allowances limited by the cap.

This system is a popular option used to reduce emission of pollutants, most notably green house gases. It operates similarly to a stock market in which the benefit of the system goes to the nations, regions or industry that are able to reduce their emissions through its use.

Trade War Looms Over Airlines’ Refusal to Comply with EU Cap-And-Trade Law

In June, I wrote about whether the US was right to seek an exemption from the European Union’s Emissions Trading Scheme (EU ETS)…

EPA, SEC Take the Lead on U.S. Environmental Progress

Businesses beg for definitive rulings on issues such as carbon pricing and environmental social governance (ESG) reporting requirements, meanwhile the legislature clamors (successfully)…

Markets at Risk of a “Carbon Bubble”; Fossil Fuel Reserves, Companies Way Overvalued

A "carbon" bubble exists and massive misallocation of capital is taking place in world financial markets as fossil fuel reserves and the shares…

Is the US Right To Seek Airline Exemption From European Carbon Law?

Business Green reports that US Airlines, American Airlines, Continental and United, along with their trade association, the Air Transport Association (ATA), will file…

Debunking Myths: How a Robust Cap-and-Trade System is Vital to California’s Economy

With California’s robust program for AB 32 set to launch in 2012, its cap-and-trade component has recently been a source of litigation, political…

Despite Lawsuit, California Business Leaders Support a State Cap-and-Trade System

California CEOs and business leaders sent a letter to Governor Jerry Brown urging him to not revise California’s cap-and-trade system. The California Air…

New Jersey Leaves the Regional Greenhouse Gas Initiative

New Jersey Governor Chris Christie (R) announced that his state is leaving the Regional Greenhouse Gas Initiative (RGGI), a cap-and-trade scheme involving 10…

Pollution Cap and Trade Cleans the Chesapeake Bay

By: David Delasanta Chesapeake Bay – Current Situation The Chesapeake Bay is in a deplorable state. The waters of the 64,000 square-mile watershed,…

EPA’s “Power Grab” More of a Tiptoe

Under the Bush Administration, greenhouse gases were not considered pollutants. The question was settled in a Supreme Court case in 2007, and whether…

EPA Regulations in GOP Crosshairs

Last year, after successfully being vilified as “Cap-and-Tax,” Cap-and-Trade was defeated. Not that I was particularly upset about it. . . After all,…

California to Create the Nation’s First-of-its-Kind Carbon Market

“The King is dead! Long live the King!” I never really understood what that phrase meant – until now. Supporters of carbon markets…

Billionaire Richard Branson Calls For a Global Carbon Tax

Sir Richard Branson, the brash, suave, billionaire adventurer has suggested that a carbon tax can stave off a global climate crisis, as long…

Why California Should Adopt a Global Warming Gas Emission Fee

By: David A. Bainbridge Failed states are growing in number–Somalia, the Congo, Afghanistan, Iceland, Greece, Ireland, and California? If California can’t eliminate its…

Chicago Climate Exchange to Cease Operations

The Chicago Climate Exchange (CCX), the U.S.’s only emissions credit exchange, will close shop by year’s end, citing a lack of legislative interest.…

Eliminating Fossil Fuel Subsidies Trumps Cap and Trade

This past Sunday morning, I spoke at a charity brunch in Virginia. The brunch was actually part of a benefit to raise money…