Emissions’ trading is the next big thing after online trading. Eastern states of the United States have recently introduced a price for greenhouse gas emissions – $3.07 per ton. Ignoring the national forum, these states went ahead with auctioning carbon dioxide emissions.
In the US, carbons trading, in the form of credits, carbon taxing and ‘cap and trade systems’ are commonly lined up for the national agenda, in working towards decreasing the effects of global warming. A “cap and trade” approach establishes an aggregate cap on all sources which are then allowed to trade amongst themselves, to delineate the sources responsible for the total pollution load.
The auction held by the Regional Greenhouse Gas Initiative (RGGI), had placed power play into the hands of power producers, who were now the customers, willing to bid and thus it was completely sold out. The cap on emissions per year is 188 million tons, so the pressure on customers isn’t very high. The goal is to lower the cap by 10 percent in increments, to a point where the initiative will actually be reducing emissions, instead of just taxing them.
After bouncing around the idea of whether to credit the carbon emissions to sources (producers) or to the consumers (people), the debatable ethical side of this trading has come into focus. The concept is very simple, the industry or factory that cannot cut down its emissions has to buy them from a factory that exists neutrally, causing limited pollution. The concept exists due to convenience, but the real question is how long will the trading compensate for the increasing amount of pollution.
Source: Popsci