What Does Cap & Trade Mean?
The goal of the cap and trade programs is to reduce pollution and improve air quality. Simply put, the program creates "pollution credits" that can be sold on the open market.
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Definition
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Cap and Trade is the name given to the system of establishing maximum air pollution output (the cap) and allowing those companies who don't reach their maximum output to sell off their remaining allotment (the trade).
Misconceptions
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One of the primary misconceptions about a cap and trade program is that it reduces air pollution. That's the overall goal; however, as long as there are allotments to buy and companies have the funds to purchase them, air pollution will continue until all caps are accounted for. Air quality will only improve when the caps are lowered.
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Benefits
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Efficiently operating companies that are able to control their pollution output and stay below their caps benefit by being able to sell their extra pollution credits. At the same time, polluting companies are encouraged to save money by improving their air quality output.
Problems
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A detrimental side effect of a cap and trade program is that some areas of the country can be more intensely polluted than others. While overall standards are met nationally, the air quality in the regions of heavy polluters is poor since these companies can pay rather than decrease emissions.
Pollutants
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Mercury is particularly problematic. While other pollutants tend to disperse and have lower toxicity, mercury tends to accumulate near its source. This increase is detrimental to surrounding communities, and affects waterways in addition to air quality.
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References
- Photo Credit Image by Flickr.com, courtesy of Thomas
