Cap and trade: pros and cons
Here's how a cap and trade system works:
—A government entity sets a limit (cap) on the amount of a "pollutant," such as carbon dioxide or another greenhouse gas. Entities that have an overall increase in sequestered carbon may be eligible to sell the extra as carbon credit (trade). Carbon sequestration commonly occurs in agriculture via an increase in vegetation (which uses carbon dioxide in photosynthesis) or an increase in dead plants (organic matter) in the soil.
—Companies are issued permits from the government allowing them to emit a certain amount of greenhouse gas "pollutants." This is called a carbon allowance. Any amounts emitted must be offset by a carbon allowance or carbon credit.
—The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level.
In theory, those that can easily reduce emissions or increase sequestration most cheaply will do so, reducing pollution at the lowest possible cost to the company and society as a whole.
However, many environmental groups strongly oppose the use of offset and credits because they believe it does not create harsh enough disincentives for "polluters" to clean up their act. They would prefer that emissions be capped, with no opportunity to trade.
Warren Morgan, a Quincy grower and packer who served on Washington's Agriculture Sector Carbon Market Workgroup, is philosophically opposed to existing cap and trade systems. Such systems are created by the political process and he believes that with so much in the hands of lawmakers, industries looking for favorable treatment will spend tremendous amounts of money on lobbyists and political contributions in an attempt to influence the process and to avoid being disadvantaged.
He is also concerned that consumers will bear the burden through increases in the prices of goods as industries pass on their extra costs associated with compliance.
"In the end, the effect on our climate as a result of this law will be neither recognizable nor quantifiable, but we will most certainly be poorer," he said.