Monday, January 11, 2010

Cap and trade is so passé

There’s a push on to cut those nasty Wall Street people out of climate control in the U.S. It’s called cap and dividend as in there are still permits for businesses to belch global warming gasses, but the income generated through sales of the permits mostly go back to the public. They wouldn't be traded in the Chicago marketplace specially established for that and patterned after the Mercantile Exchange there.

Every energy conference I’ve been to has provoked questions about how to curb financial speculators in the market for carbon credits. You know, those people who like to make money for nothing. (I wish I hadn’t said that because the MTV song is in my head now, probably for hours.)

Continuing. The supporters of the proposal say while energy prices will go up under any cap system, especially as the permits shrink, allowing fewer emissions. The key is consumers under the dividend version get – dividends. They would amount to about 75 percent of the income the government gets for the permits. The rest of the green would go to environmental research.

The bad news is both the passed House version of climate legislation and the proposed Senate version are cap and trade. The good news is the new proposal would limit a business’ ability to use offsets, like planting trees in Sri Lanka, to make their emission quota. And then there's that limited trading of greenhouse gas permits.

The cap and dividend proposal has a Republican, Sen. Susan Collins, R-Maine, as a co-sponsor, so maybe it would have some momentum since Republicans who support cap and trade are an endangered or extinct species. However, even if the Senate passes a dividend plan, they would have to negotiate with those House people who make those Wall Street people look like school kids.

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