Question

What are examples of arguments for and against a cap and trade program?

Answer 1

There are different arguments in support of the cap and trade program. The first argument is that it creates incentives for the firms who opt for the efficient technology, process and operations to emit the reduced level of pollution. The second argument is that there is a cap on the total pollution emitted in the business environment. So, the government achieves the target pollution emission level with the cap and trade program. Besides, it encourages firms to opt for clean and renewable energy sources that helps in preserving the natural resources.

Though there are arguments against the cap & trade program. The first argument is that big companies don’t control emission and buy the pollution related permits from the other efficient organizations. Hence, the objective to implement the clean and more efficient technology among all the organizations is failed. The second argument is that firms always opt for the short term benefits and try to buy the carbon credits, rather going to the superior energy sources that creates less pollution.