Today’s Calamity: Cap and Trade is a Lobbyist’s Dream Come True
Nicolas Loris /
Under the Waxman-Markey cap and trade program, businesses that emit carbon dioxide and other greenhouse gases must obtain allowance permits from the federal government for every ton of carbon emissions they produce. The government issues fewer allowance permits in each subsequent year to decrease overall emissions, so the permit price rises as the reduction in supply has to meet the same demands.
During his campaign run, President Obama told Grist: “I believe that, depending on how it is designed, a carbon tax accomplishes much of the same thing that a cap-and-trade program accomplishes. The danger in a cap-and-trade system is that the permits to emit greenhouse gases are given away for free as opposed to priced at auction. One of the mistakes the Europeans made in setting up a cap-and-trade system was to give too many of those permits away.”
Well, guess what? The Members of Congress in the House of Representatives made the same mistake.