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Emissions and Cap and Trade



Environmentally speaking the conversation boils down to emissions. If there were no emissions from producing and consuming fossil fuels all would be fine. Nothing would be going into the earth’s atmosphere except heat and steam. But in reality we spew emissions from power plants and refineries, vehicles, industrial smokestacks, and heating and air conditioning units in homes and businesses. Add to this list trash fires, cooking fires, wildfires and volcanic eruptions. With six billion people creating emissions we have a large problem! Much of what goes up in smoke accumulates and hangs around, creating both environmental and health hazards. This connects the problems of emissions to the cost of health care.

Strategies in response to the problem fall into two categories:

o develop non fossil fuels.

o use less fossil fuels in the meantime.

The hopes for non fossil fuels include:

o hybrid vehicles (engines that combine gasoline with battery stored energy).

o hydrogen.

o wind and solar produced electricity.

o ethanol produced from corn.

o fuels produced from grass, sugar cane, seaweed, other plants.

o tidal generated electricity.

o thermal heat derived from volcanoes.

o clean coal and natural gas as transitional fossil fuels that have less damaging emissions.

The hopes for reducing the use of fossil fuels in the short term include:

o tougher emission standards for vehicles

o higher mileage standards for vehicles

o more energy efficient appliances, lighting, computers, air conditioners and TVs

o tougher emission standards for smokestacks on power plants and industrial buildings

Cap and trade proposals are being developed by advocates in the Administration and in Congress as an “ideal” strategy. In a nutshell, the government would set emission standards for industrial plants and sell licenses for emitting the allowable amount. There would be fines for exceeding the allowable amount. It would be allowable to sell, buy, and trade the allowable amounts. For example, a company using less than its allowable amount of emissions could sell or trade the rest to a company emitting more than its allowable amount. In order for this approach to work there would be government regulations and enforcement. Government would decide the allowable amounts.

We can expect to hear numerous proposals as well as heated resistance to cap and trade schemes, even as Congress currently considers legislation to force cap and trade implementation. This debate has been going on for years already. What makes it appealing to government is that it speaks to the threefold motivations driving energy policy: it creates incentives to cut emissions, it raises the cost of fossil fuels so as to make a market for alternative fuels, and it generates revenue for the government.

What makes cap and trade objectionable to opponents is that it means more government regulation and control, along with more fees and fines creating government revenue. This increases the cost of energy used to produce electricity, goods and services. It places in the hands of government the control of emissions, as though the right to emit were a taxable commodity. Once again political and economic factors, not only environmental science, would drive the policies. Two of the foundations under our economy have always been energy and credit. Traditionally when these have been cheap business has been good and when these have been expensive business has been bad.

Bottom line: plan for increased energy costs no matter what the outcome of the debates. Alternative fuels will be expensive. Fossil fuels will be expensive. Electricity derived from either type of fuel will become increasingly expensive. Recognize that the era of cheap anything is likely over. Both the private sector and federal government now see advantages to raising the cost of producing and using energy.


Source by Lawrence Losoncy


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