Global Carbon Emissions Trading

Global Carbon Emissions Trading – is this a good idea?

The Clean Air Act of 1990 was created to establish a market for dumping rights. The Environmental Protection Agency (EPA) decides how much pollution they feel should be allowed in a certain area and issues “marketable rights for that quantity of pollution” (Salvatore, 2012, p. 552). These dumping rights, that are issued by the EPA, are able to be bought and sold between firms in the industries that require them and are likely to be bought by the industries that need them the most. The idea behind these dumping rights is that “both firms (and society) would gain without any overall increase in pollution” (Salvatore, 2012, p. 552). The dumping rights, created by the Clean Air Act of 1990, made it impossible for a new company to build a plant that does not meet the federal air quality standards set by the EPA unless they “purchase the right to a specific amount of pollution from an already existing and polluting firm in the area” (Salvatore, 2012, p. 552).

Global carbon emissions trading was introduced on January 1, 2005, by way of the European Emission Trading System. This system is now valued at over $140 billion, worldwide. This system places a tax on carbon emissions, which increases the price of using fuels such as coal, which are considered dirty; however, there is no tax if a company opts to use wind power or cleaner fuels. Essentially, companies that polluted the air by using dirty fuels are charged a fee for each ton of carbon monoxide that is released into the atmosphere.

Companies that operate in the following industries are most likely to be affected by a global emissions trading law: mineral and metal ore refineries, glass/brick/tile/stoneware manufacturers, combustion installers, and paper producing plants. Additionally, airlines are currently affected by these laws and it has proven to be very costly for them. Airline chiefs claim these laws cost the industry about 3.5 billion Euros per year....