Analyze Two Approaches to Combating Global Climate Change

Analyze two approaches to combating global climate change: Cap and Trade or a Carbon Tax. Evaluate which is the most effective?

Introduction

Global climate change is the most significant environmental issue facing the planet. As the Kyoto Protocol will expire in 2012, the global conversation is dominated by its successor. Two general policy approaches dominate the discussion. The first is national and international greenhouse gas (GHG) emission trading which often referred to as “cap and trade”. The second is a carbon tax on carbon emissions. This essay will focus on the arguments between cap and trade versus a carbon tax in order to combat global climate change. The paper begins with brief explanation of each approach and evaluates the arguments for and against this system. Finally, it will examine which approach best based on and what is in the public interest.

The term “cap and trade” refers to a system that put limitation on

carbon emissions. It will establish a “commodities market for carbon, in which power providers can buy and sell emission permits” (Ray, 2009, para. 7). For instance, a company cannot satisfy the imposed cap on carbon emissions, it has right to purchase additional permits from companies who are functioning below the cap. As time goes by, the carbon cap would be abated which would cause in cost escalation of emitting carbon and force the emitters to operate by using renewable energy and explore other cleaner technologies. The United States Climate Action Partnership (USCAP) has claimed that “a cap and trade program has had previous success. It was used to help minimize the costs of complying with the Clean Air Act Amendments of 1990 – and dramatically reduced emissions of sulfur dioxide and nitrogen oxide” (United States Climate Action Partnership, 2009, para. 2).Theoretically, the system is self-balancing, allowing under-polluters to offset excessive polluters in order that keep the quantity of emissions under a compelled level....