ENV-07-120 Key Impacts and Strategies in a Carbon Cap-and-Trade

Description:

This paper will discuss allowance and credit trading programs in the context of achieving reductions of greenhouse gases (GHG). Currently, several serious proposals exist at the national level, all of which would allow for reductions of GHGs to be achieved through market-based trading programs. Many in industry and academia, however, have called for a “carbon tax” instead of a market-based trading approach as a more efficient means of achieving GHG emission reductions. Additionally, this paper will briefly examine trading programs under the Kyoto Protocol, including the European Union’s cap-and-trade program, which has had some measure of success, at least in terms of demonstrating that a carbon trading program is a workable proposition. Finally, this paper reviews the U.S. renewable fuels standard and trading program.