Cap and Trade

May 22, 2009 10:42am

The House Energy Committee worked late last night.  There was a lot of compromise, a lot of horse trading.  But in the end they voted, 33-25, in favor of a bill that would create the first federally-mandated system to curb greenhouse gas emissions.
There have been similar bills before, all of which died, and there is no saying this one will get through the full House and Senate. But its backers say this time, with Mr. Obama talking about "a culture change on climate change," and with a Democratic majority on the Hill, the current bill could be for real. "This bill, when enacted into law this year, will break our dependence on foreign oil, make our nation the world leader in clean energy jobs and technology, and cut global warming pollution," said Rep. Henry Waxman (D-Calif.), the committee chairman and a co-sponsor of the bill with Rep. Ed Markey (D-Mass.).  Read Waxman’s statement HERE. Detractors, meanwhile, are worried, talking about Waxman-Markey as a covert energy tax — one that comes at a terrible time for a struggling economy. House Republicans, led by Rep. Joe Barton (R-Tex.) have offered an alternative plan, which you can find HERE. The idea behind the bill, as has been long discussed, is "cap and trade." In simple terms, large emitters of carbon dioxide — power companies and the like — are given "permits" to give off a certain amount of gases. The permits, when you add them all up, allow less CO2 than is currently released — but the permits can be traded, bought and sold, etc. So if one company just started building a super-efficient power plant (or a wind farm, for that matter), and can easily come in under its limit, it can make some money by selling some permits to one that would have a tougher time. It doesn’t matter, under the bill, who does the work, as long as the total amount of greenhouse emissions goes down. This could easily be dismissed as fun with numbers, except that it was used by the administration of George H. W. Bush to control acid rain. Both the White House and the Environmental Defense Fund, which worked the idea through with them, said it was a low-cost solution to the problem.   See a cap-and-trade summary from them HERE. Would it work now?  We’ll see how it flies with Congress, and with the American people.  That would be you.

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