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Cap and Trade

WellHome. CAP&TRADE Improve the weather inside. A Finely Tuned System of Checks and Balances Flexible Cap & Trade approach diagram Total emissions reduced: 300 tons Cost to reduce: $9,000 Before: 600 tons Cap & Trade and Emission Tax differences After: 500 tons . C&T lets consumer (marketplace) set price. Before: 400 tons Permits sold ยท Emissions tax places a fee on each unit of emissions released. Aften reduced 200 tons Payment trade 100 TONS reduced 200 TONS PLANT A PLANT B What is the cap and trade program? The cap-and-trade program, also known as emissions trading, is utilized by government agencies as a strategic environmenal policy tool for lowering the amount of pollutants in an area. This is done by placing a limit (or cap) on the total amount of emissions that can be released in a fixed time period. In order to enforce the cap, a system of checks and balances, or allowances, are distributed amongst the industries in the program. THE CAP How is it created? Based on the following factors a fixed limit is set for the total amount of emissions allowed by sources covered by the program. Factors: The specific companies required to limit their emissions and the types of emissions that need regulation. GHC CO2 SO2 OIL GAS NO2 The region that the cap controls. The amount of time the cap is in affect and if it will become more strict over time. 2010-2011 JUNE ALLOWANCES What are they? An allowance is similar to a permit. It gives a company the right to emit a specific amount of emissions. 1 Ton of Emissions 1 Unit of Allowance For every ton of emissions a company must submit 1 allowance. Allowances are submited by: - producers of polluting substances - distributers whose consumption generates emissions States or Nations How do factories comply with the cap restrictions? The actual 1 Reduction emissions are in fact measured and The company can reduce its emissions internally by finding alternative production means. The company then sells its allowances to another compantes are penalized tf numbers are not company. met. Trade If a company cannot afford to reduce its emissions it can purchase an allowance from another company, which is typically less costly than implementing a new system designed to lower emissions. $- * Companies are free to chose the least costly approach to adhere to the cap. ? Why does this program work? The allowances are traded until the point where costs are the same for every company to lower their emissions. The program is designed to use financial incentives to regulate the polluting emissions of major industries. Consumers and companies are able to gradually adapt to changes in the fossil fuel marketplace. Therefore, the daily flow of life can continue smoothly!

Cap and Trade

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The cap-and trade program, also known as emissions trading, is utilized by government agencies as a strategic environmental policy tool for lowering the amount of pollutants in an area and increasing ...

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Environment
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