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Published on June 8th, 2010 | by Susan Kraemer


Five Good Things Cap-and-Trade Has Done For You

June 8th, 2010 by  

There is an uproar of misguided hysterical opposition by the ill-informed on the Left and by the very carefully mis-informed on the Right – all opposing the cap-and-trade policy being suggested to cut carbon emissions, within the climate bill.

The Left is certain that Green sellouts just want Wall Street Fat Cats to make a killing, the Right is certain that Al Gore will get rich off cap-and-trade in a 20-year plot to take over world financial markets.


Both are ridiculous fears. We’ve actually had cap-and-trade for years. You just haven’t heard about it, because each cap-and-trade market just worked, was economical, and got the job done. No Wall Street Fat Cats or Al Gore got rich.

If you’re glad there’s no more Ozone hole over Antarctica, thank cap-and-trade for that:


The essentials are a cap, which is a finite limit on total pollution. Every year the limit is set lower. This guarantees the pollution will be reduced. If not, big fines for offending polluter. Much, much less expensive for polluters to comply. Means the pollution gets reduced. (By contrast, a carbon tax could allow those who can afford it to keep polluting as much as they want. Does not guarantee a reduction.)


Trade enables the more efficient competitors within an industry to finance pollution-reducing-measures using funds from their competitors who chose to stay with the pollutant.  (By contrast, without trading among polluters, the funding for switching to a clean economy must come from taxpayers.)

With cap-and-trade, the funds come from within the industry being regulated. For example: Tesla, by being a clean automaker, was just able to pick up $13 million from its relatively dirty competitor Honda, reducing its R&D costs to innovate to build the solution to our dirty driving habit.

Here’s five pollutants we already reduced using cap-and-trade.

1. Getting the lead out of your gasoline. In the 80’s, congress set up a precursor to cap-and-trade that brought it closer than other credit programs using trading and banking of environmental credits. Job done, we have no lead in gasoline now, (so it must be something else that is making us dumber now!) and it was cheaper than expected for the oil industry to comply.

2. Closing the Ozone hole. Industrial manufacturers affected by the need to phase out refridgerant pollutants were put in a cap and trade system in order to meet the Montreal Protocol goals. They did meet the goals, phasing out CFCs and halons. It was not expensive.

4. Cleaning Los Angeles Air. Under under the RECLAIM cap-and-trade program begun in 1994, California’s South Coast Air Quality Management District has reduced NOx emissions 60% and SOx emissions 50%, and continues to (previous story) clean up.

5. Cutting Europe’s carbon footprint to half ours. The EU Emissions Trading System has operated successfully for two years and covered 11,500 emitters: not just oil and coal (as is proposed here), but metal, paper, glass and ceramics production as well. The paper industry cut its emissions almost in half, the auto industry over there now makes cars cleaner than ours and the EU  lowered its carbon emissions below its Kyoto targets.

3. Ending Acid Rain. A cap was placed on allowable emissions of SO2, a precursor to acid rain. The cap ratcheted down every year. It worked. The polluting coal plants traded among themselves with the EPA administering the program. We have no acid rain now, and it was cheaper than expected to stop polluting. SO2 emissions from the power sector decreased from 16 million tons in 1990 to 10 million tons in 2005, and now a 50% reduction has been achieved in the 20 years of the program.

Imagine if we could look back at 2010 and say this was the year we finally overcame our fear of the other side, and decided to work together to make something that good happen again. With oil now despoiling one our shining seas, its about time we did.

Image: The White House at Flikr 


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About the Author

writes at CleanTechnica, CSP-Today and Renewable Energy World.  She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.

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