Custom «What is Cap and Trade» Essay Paper

Abstract

Environmental issues continue to feature in every media house and in debates that have been conducted in different forums. Among the places that these issues have featured are the Senate, the Congress, world leaders’ meetings, etc. Top on the list of environmental issues is global warming. There are arguments that global temperatures have continued to rise each and every year resulting in drastic environmental and climate changes. This has raised concerns on the future of the globe, and life on earth in general. As a result of this, there are actions plans that are being pursued across the globe to reverse the effects of global warming. Among these action plans is Cap and Trade. This research therefore will examine Cap and Trade, the people who support it and its pros and cons.

Introduction

Global warming continues to become a reality each and every day. Scientific researches that have been carried out recently reveal that global temperatures have gone up (Revkin, 2009). While these temperatures have been rising, slowly but consistently, they have been rising rapidly in the recent times. This has raised fears among scientists, environmentalists, politicians and the general society. In this regard, there are plans have been underway to reduce the amount of carbon dioxide that is released into the environment as a result of human economic activities. One of these actions plans is Cap and Trade. Cap and Trade can be defined as the ultimate measure that is directed towards reducing the overall amount of greenhouse emissions that are released into the environment by large scale emitter or rather companies. Once Cap and Trade policies have been implemented, companies and other big emitters of greenhouse gases are required by law to obtain permits that would allow them to emit these gases into the environment. The measures that are implemented by Cap and Trade to reduce emissions of greenhouse gases will then continue to be stringent after every specified period of time thus being in a position to reverse the effects of these gases on the environment.

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There are various factors that have been taken into account when formulating and implementing this action plan as a way of reducing the overall greenhouse gaseous emissions into the environment. To begin with, one of the factors that have been taken into account is the fact that there are companies that are big emitters than others. Therefore, there are specific limits that are imposed on these companies depending on their capacity of greenhouse emissions into the environment. However, it important for one to understand that despite the fact that some companies are big emitters of greenhouse gases, there are specific amount of these gases that are supposed to be emitted into the environment once the Cap and Trade policies are implemented (American Progress, 2008).

On the other hand, there is a substantial trade that is involved in the process of implementing the policies of Cap and Trade. To begin with, there are companies that are big emitters than others. Therefore, once a company has become more efficient, it can sell its permit to another company that is struggling with efficiency issues in regard to gaseous emissions into the environment. This will result into trade that will allow efficient companies to gain financially from their effort in reducing greenhouse gaseous emissions into the environment. Similarly, there is an element of revenue increase on the part of the Federal Reserve. This emanates from the fact that emission permits are not given out freely. Instead, companies have to pay for these permits and this act as a way of revenue generation by the Federal Reserve. The amount obtained here can be used to enhance, through implementation of public environmental policy, the overall preservation process of the environment. For example, the Federal Government can utilize the amounts it has collected in funding environmental programs in the society (American Progress, 2008).

Research findings and Discussion

Supporters of Cap and Trade

It was found out that there are different groups of people that support the Cap and Trade legislation that would oversee the implementation of Cap and Trade policies. According to Wall Street Journal (2009), there were arguments that the house speaker had put the Cap and Trade legislation on a forceful march through the House. In this line of thought, there were probabilities that this legislation had a probability of getting a fully vote of the house. In this regard, the Democrats fully supported the passing and implementation of the cap and trade as a way of dealing with the current increased gaseous emissions into the environment. The support of the Cap and Trade legislations by the Democrats comes amid arguments that there is an element of ignorance of the economy theories by the Democrats in order to ensure that this legislation gets the vote of the house. The critics of the Cap and Trade legislation argue that there are a lot of caveats in the Cap and Trade legislation that renders it useless (Wall Street Journal). These critics argue that the Cap and Trade policies would add a burden to the common citizen as it is a hidden form of tax that Democrats would rather not speak about or reveal to the Americans.

Similarly, there are other supporters of Cap and Trade that have emerged that supports the passing of its legislation and implementation in the American society as a way of dealing with the problems that have resulted from gaseous emissions into the environment thus becoming a factor that has contributed greatly to global warming. These supporters include the environmentalists, or rather environmental groups and the business people that have voiced their support for Cap and Trade in an effort to support the setting of ceilings on the total amount of greenhouses emissions into the environment by companies and large emitters. Whereas there is a lot of resistance to the legislation of Cap and Trade as a superficial way of dealing with greenhouse gases, the supporters of this policy have soldiered on and have been showing no signs of surrender (Broder, 2010). According to Environmental Defense Fund (2009, January), the business community perceive the Cap and Trade as one of the best way that could be used to foster economic growth while at the same time controlling the amount of greenhouse emissions. For example, the chairman and the CEO of General Motors affirmed that this was an excellent way of taking care of the environment while at the same time promoting the creation of job opportunities for the American people which would promote economic growth especially at this time of economic recovery from the recent recession (Environmental Defense Fund, 2009).

Pros and Cons of Cap and Trade

Despite the fact that there have been arguments both for and against Cap and Trade as a way of dealing with the emissions of greenhouse gases into the environment, there are pros and cons of implementing the policies that have been presented by Cap and Trade that need to be considered before an appropriate choice is made on whether it is worthy investing in or not. First, it was found out that the Cap and Trade legislation would reduce the amount of greenhouse gaseous emission into the environment thus slowing down the rate of deterioration of global environment especially in regard to global warming. As a result of this, the society would be in a position to control environmental-related disaster such as floods and drought that have resulted from destabilization of the environment and environmental factors (Organization for Economic Cooperation an, 2009).

In every society, there have always existed an element of irresponsibility until when a person comes in and acts contrary to the irresponsible behaviour that has been seen in such a society. This is also the case in the modern world. It is important for one to understand that there has been irresponsible behaviour in regard to taking care of the environment and each nation has been looking up for a person to show them the way in regard to global warming issues. Therefore, implementing Cap and Trade legislation in the United States would sound as a wake up call for other nations to follow suit in coming up and implementing strategies that would oversee a general reduction in greenhouse gaseous emissions into the environment by their companies. For example, one of the countries that are likely to follow in the footsteps of the United States is China. Such a step would reduce environmental pollution by a substantive margin across the globe (Organization for Economic Cooperation an, 2009, p.54).

On the other hand, there are arguments that the assumptions that other countries would follow the United States in implementing policies that would create a channel whereby greenhouse gaseous emissions controlled are misplaced as there are important issues in the past that have not been acted upon by other nations even after the United States had enacted them. In reference to KOTA (2009), nations such as China have failed in the past to follow the example of the United States and there are no indications that they would try to do it now. As a result, acting on Cap and Trade positively as a way of dealing with global warming would only work in the United States and it will be sheer luck if such policies are implemented in other parts of the world outside the United States of America.

There have also been arguments in regard to the real cause of global warming. Those that support the implementation of stringent measures on human activities that have been found to emit a lot of greenhouse gases argue that human activities are the major cause of global warming. On the other hand, the sceptics propose that there is no scientific evidence that points directly at human beings as the causatives of global warming. Consequently, when one goes by the arguments of the sceptics, it would be unfair to implement Cap and Trade policies as they would hamper industrial activities without any cause. According to Martin (2009) of Business Lexington, such a move would wear down industrial activities, resulting in losses of job. Martin (2009) reiterates that in Kentucky alone, 23,000 jobs would be lost by 2020 if Cap and Trade policies are implemented.

Conclusion

Environmental degradation has continued to be a nagging issue in the modern society, especially global warming. There are meetings, seminars and forums across the globe that have been held to deliberate on different methods that would be implemented to slow down the effects of global warming in the short run and completely reverse its effect in the long run. Therefore, one of the plans that is still in the pipeline that most analysts believe would deal effectively with global warming issues is Cap and Trade that works on imposing a ceiling on the amount of greenhouse emissions that should be released into the environment by companies. However, these policy analysts must understand that there are pros and cons of implementing Cap and Trade and careful considerations must be taken into account before it is adopted or disregarded.