What Might Man-Induced Climate Change Mean? [Excerpt]
Society, Science and Climate Change [Excerpt]
The Cost of Combating Global Warming
Toward a Real Global Warming Treaty
Stick with Kyoto: A Sound Start on Global Warming
What Makes Greenhouse Sense?
What to Do About Climate Change
Copenhagen's Inconvenient Truth
How to Salvage the Climate Conference
The Low-Carbon Diet
How the Market Can Curb Climate Change
Globalizing the Energy Revolution
How to Really Win the Clean-Energy Race
Tough Love for Renewable Energy
Making Wind and Solar Power Affordable
Cleaning Up Coal
From Climate Culprit to Solution
How Big Business Can Save the Climate
Multinational Corporations Can Succeed Where Governments Have Failed
How Washington Can Bolster a Stronger Climate Deal
Why Municipalities Are the Key to Fighting Climate Change
The Geopolitics of the Paris Talks
The Web of Alliances Behind the Climate Deal
The Problem With Climate Catastrophizing
The Case for Calm
Climate Catastrophe Is a Choice
Downplaying the Risk Is the Real Danger
Paris Isn't Burning
Why the Climate Agreement Will Survive Trump
Why Trump Pulled the U.S. Out of the Paris Accord
And What the Consequences Will Be
Trump's Paris Agreement Withdrawal in Context
The Polarization of the Climate Issue Continues
The global economic crisis has battered the free market's reputation, but the market nevertheless remains a powerful tool both for allocating capital and for effecting social change. Nowhere is this truer than with the challenge of confronting and reversing climate change. Of all the market-based tools available for addressing this problem, the most potent are cap-and-trade systems for greenhouse gas emissions.
In their most basic form, cap-and-trade systems work by making it expensive to emit greenhouse gases. As a result, the owners of an emissions source are motivated to replace it with something less damaging to the environment. If they are unable to, the trading provisions allow them to purchase permits to continue emitting until they are ready to invest in new technology. Over time, as the amount of carbon allowed into the atmosphere is reduced, the price of a permit is expected to increase.
In existing cap-and-trade mechanisms, such as the European Union's Greenhouse Gas Emission Trading Scheme, governments cap the total amount of emissions allowed, and the amount of emissions permitted declines over time. Organizations such as utilities, factories, cement plants, municipalities, steel mills, and waste sites are given or sold permits that allow them to emit a certain portion of the relevant region's total greenhouse gases. If an organization emits less than its allotment, it can sell the unused permits to entities that plan on exceeding their limits. Under cap-and-trade systems, companies can trade permits with one another through brokers or in organized local or global markets.
The American Clean Energy and Security Act of 2009, the 1,201-page bill introduced by Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) and passed by the U.S. House of Representatives on June 28, is an ambitious attempt by Congress to play catch-up after having failed to approve the Kyoto Protocol -- which was ratified by 183 parties, including all the developed countries except the United States, in 1998. The bill adds further amendments to the Clean Air Act of 1970 and grants new authority to the
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