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Reducing Emissions: Cap-and-Say What?

There’s been a lot of talk in the media and government about cap-and-trade, cap-and-auction, cap-and-somethingelse systems to address reducing carbon emissions. If you’re like me, you glaze over when you hear advocates of one of these strategies begin to push for the adoption of their pet strategy. Is there a difference? Does it matter? Well, yes.  There is a difference, and the differences do matter. Luckily, Peter Barnes explains the various systems and the differences between them in his book Climate Solutions: A Citizen’s Guide. Here’s how Peter breaks it down: Three varieties of cap-and-trade One of the tools described in the previous section—carbon capping—deserves special attention, in part because it has several permutations, and in part because it’s likely to be adopted in some form. Carbon capping comes in three varieties: cap-and-giveaway, cap-and-auction, and cap-and-dividend. All start with descending caps. The differences among them lie in who pays whom, and how leaky the caps are. In cap-and-giveaway, permits are given free to historic polluters. This is called “grandfathering.” The more a company polluted in the past, the more permits it gets in the future—not just once, but year after year. As the descending cap raises the price of fossil fuels, everyone pays more, and the companies that get free permits keep his extra money. Their profits and stock valuations soar, while energy users bear the costs.

In Europe, a carbon cap-and-giveaway program handed billions of Euros in windfall profits to a few large utilities. In the U.S., an MIT study estimated that grandfathering permits to American utilities would give them hundreds of billions of dollars in extra profits every year for several decades—a staggering amount of money that would  ultimately flow to their shareholders. In cap-and-auction, permits are sold to polluters, not given away free. Permit revenue is collected by government rather than private corporations. What government does with the money is then up to public officials. It could be used to speed the climate transition, though there are no guarantees. In cap-and-dividend, permits are also sold, not given away free. However, the revenue doesn’t go to the government—it comes back in the form of equal dividends to all of us who pay it. This revenue recycling system is sometimes referred to as a sky trust. Dividends address the dark side of carbon capping—the fact that rising carbon prices will take money out of everyone’s pockets. According to the Congressional Budget Office, the average U.S. household will pay $1,161 a year in higher energy prices when carbon emissions are reduced 15 percent. As emission reductions increase, so will the cost to households. By recycling higher carbon prices back to households, rebates protect our disposable income while we reduce carbon emissions to safe levels.

(Source: Congressional Budget Office, “Trade-Offs in Allocating Allowances for CO2 Emissions,” table 1, p. 2,

The Limits to Growth and Greece: Systemic or Financial Collapse?

Could it be that the ongoing Greek collapse is a symptom of the more general collapse that the Limits to Growth model generates for the first two decades of the 21st century? Author Ugo Bardi (Extracted: How the Quest for Mineral Wealth is Plundering the Planet) examines the correlation between what is unfolding between Greece […] Read More..

Wild Edibles: 5 Tips for Beginner Foragers

Ever spotted a dandelion growing in your backyard and wondered, can I eat that? According to wild plants expert Katrina Blair, the answer is a resounding yes. And there are plenty of other commonly found weeds that fall into this category as well. In her book The Wild Wisdom of Weeds, Blair introduces readers to […] Read More..

10 Books to Celebrate the International Year of Soils

Beneath our feet lies a resource that is critical to our future. It’s the first thing we think about when it comes to farming and gardening – and yet, one of the last things considered when thinking about the long-term preservation of our earth. It’s the basis for healthy food production, is a crucial tool […] Read More..

5 Shareable Strategies for Creating Climate Action

Frustrated about climate change? You’re not alone. Most people in our society find themselves somewhere on the spectrum of depressed about our climate situation to flat-out denying that it exists. In fact, the more information about global warming that piles up, the less we seem to do to combat it. What is the reason for this […] Read More..

A Permaculture Approach to Managing Hedge Bindweed

As Permaculture Month continues, we are making our expert authors available to answer your burning permaculture questions. If you have a question to submit, fill out this form. In the below Q&A, Tao Orion, author of the new book Beyond the War on Invasive Species, discusses how she approaches weed management. Orion believes invasive species are good ecological […] Read More..