The cap-and-trade system allows smaller businesses to sell their pollution to other businesses. This allows for businesses with a higher cost of green technology to pay less than the total upgrade of their manufacturing process, allowing green industry to incorporate greater revenue, while still reducing total pollution, over the short term. This also allows congress to raise and lower the cap, as seen fit, allowing for more stringent or relaxed standards.
People hate the word tax. If you provide people with an option of being taxed or having a limit put on them, more times than not they will elect the limit. Politicians might also support a pollution solution that doesn't have the word tax in it as they know that by raising taxes their political good will among the voters will take a hit. Also, the limits provide a real concrete way to reduce pollution.
Businesses hate nothing more than paying money for something they can avoid, so if we set the tax high we could make it really costly to go over and prevent them from wanting to go over. The more money we collect, the less they will go over. But we also have to make enforcers that won't take bribes from big business and will enforce the laws strictly.
I believe a cap and trade system is inferior to a carbon tax. In a cap and trade system, there is a fixed limit to the pollution that the industries and members of a society can engage in. The government does not know how much pollution people would actually like to have in their environment. It is not beneficial to just set a fixed arbitrary amount of pollution that is allowed. People may allow for more pollution if they get more services, higher quality products, etc. from the companies which produce the pollution. In a carbon tax system more pollution is allowed if people value their products higher than a slightly cleaner environment.
I firmly believe that a cap on carbon emissions needs to be set into place once and for all. Additionally, President Obama is in favor of the cap and trade option. Given that he is an intelligent, well-educated world leader, I support my position based on the belief that he probably knows what he is talking about.
The cap-and-trade system works very well with reducing carbon emissions compared with a carbon tax. I believe no one likes taxes, which usually has a negative connotation attached to it. A trade is much more beneficial for companies because it allows each company freedom in their operations. If one company is extremely great a reducing their carbon emissions while another needs just a little bit more, a trade would benefit both. While, a tax will only restrict companies.
Company A is a manufacturer who's potential carbon footprint is relatively low purchases excess "carbon points". Company B owns coal fired power plants and purchases the same amount of points and finds that it is less expensive to purchase points from Company A instead of reducing their carbon emissions. Since there is a cap on the total number of points available to everyone Company B can buy points from Company A without reducing the amount of carbon they release, potentially they could even increase their carbon emissions. Nationally the entire sum of carbon emissions would be capped but not reduced. A carbon tax would be a slight economic incentive for companies to reduce their carbon emissions but it too would only solve part of the problem because companies would pass the cost of the tax onto consumers if the companies could or would not reduce their carbon emissions. Neither system is a total solution. Both systems would have to be combined to and structured to compliment each other to have a net effect on reducing carbon emissions.
Global warming has been discredited time and time again, why would we burden ourselves with this inconvenient lie. The whole premise of it is laughable. We have only been keeping temp records for around a 100 years, not much of a sample size considering how long the Earth has been around. It's also quite arrogant of us humans to think in the short time we have been industrialized that we altered something so great as our atmosphere. Something else all of Al Gore's sheep fail to consider is the ICE AGE! How did that happen? How did it go away? Could it be the Earth's climate goes through different weather patterns. For those still being herded, do some research on the "Mini Ice Age" and the "Great Warming Period" around the 14th century. If you can explain those two events I may join you in the pasture.
I support a carbon tax over a cap-and-trade system because a tax at the point of production is more efficient than creating a "carbon market". The latter involves a new layer of government bureaucracy and is more conducive to corruption. A carbon tax is just another tax like a sales or an income tax.
These different options are created out of an effort to find ways to force the world to change. Making people pay for these things will only hinder developing nations from reaching the level of developed nations. Since the rich should be feeding the poor and not holding them down with both feet, we shouldn't have either a cap and trade or a carbon tax. Thus the one is not better or preferable to the other, they are both bad.
The cap and trade system implemented in Europe after 2000 was found to have had its markets manipulated, with everyone from the Mafia to brokerage houses making money. Worse of all, cap and trade did not reduce carbon emissions. The Chinese received and then sold carbon emission credits for hydro electric dams they planned on building anyway to German power plants that burned the dirtiest coal used. Instead of a carbon tax, that would discourage emissions, they bought fraudulent emissions and then used the dirtiest fuel, resulting in more pollution. Other schemes included credits for planting trees in Africa, many of which died for lack of irrigation or nutrients. Thus the pollution was generated but no absorbed in the "offset". Cap and trade only makes money for brokerage houses and bureaucrats, but it does not help the environment.
Carbon taxing is a much more effective way to penalize those people responsible for excessive carbon emissions. Unfortunately, the people who are ultimately responsible for these emission levels usually have far too much money for any tax or penalty to seriously affect the likelihood that they will stop these behaviors.
Markets are lauded for efficient pricing but if this were true, we should not see the sharp jumps and crashes that we do.
A cap and trade system would allow those making money from investments to profit at the expense of those who want certainty to invest in the real economy.
A carbon tax would be fair and flat, and affect everyone, all the time. A cap-and-trade system would just create possible loopholes and exploits that corporations would take, any chance they got. There is no way to know if a cap is actually being honored, overall, whereas a carbon tax could easily be tallied and enforced.
Taxation usually ends up infuriating the individual. So, giving brighter options with a trade-off is beneficial for both the public and our precious environment we live in.
Capping large polluters of carbon emissions needs to occur soon. But, allowing the trading of carbon credits should not be allowed. This gives the ability to large polluters to buy their way out of accepting more environmentally-sound practices. A carbon tax would also be inefficient, as it essentially does the same thing. Merely increasing the cost of operation for large pollution emitters is not the answer.
We should apply both systems to reduce the gas emissions into our atmosphere. If we only apply cap-and-trade, it will limit many company's abilities to do their work. But, if we give them the option of paying other companies who have not used all of their assigned rights to emit carbon into the atmosphere, then they can make some sort of deal that will benefit both companies, and satisfy the regulations.