Economics Dictionary of ArgumentsHome
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| Cap-and-trade system: A cap-and-trade system is a market-based approach to controlling pollution by setting a cap on the total amount of emissions allowed and creating a market for emission permits. Emitters can buy and sell permits, which allows them to exceed the cap. See also Emissions trading, Emission targets, Emission reduction credits, Emission permits, Emissions._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Policy of the United States on Cap and Trade System - Dictionary of Arguments
Kiesling I 35 Cap and trade system/Policy of the US/Kiesling: Parties could trade the allowances through the annual auction market the EPA established at the Chicago Board of Trade, as well as through private market transactions. Electricity generators were not the only parties allowed to participate in the allowance market; brokers speculating on a future price increase could purchase allowances and sell them later, and environmental groups could purchase them and retain them, which would ensure that that ton of SO2 was never emitted. The program also had a voluntary participation option. In addition, some allowances were auctioned to utilities in every year in a “revenue-neutral” auction. One aspect of better-defined property rights and lower transaction costs is using technology to do so. The EPA developed a continuous emission monitoring system and implemented it in the Acid Rain Program, enabling it to verify the amounts utilities entered into the allowance tracking system. Kiesling I 36 Using technology to reduce monitoring costs (and backed up by a $2,000/ton penalty on any emissions that exceed allowances) facilitated exchange in ways consistent with the examples Coase used in “The Problem of Social Cost.”(1) >Social cost/Coase, >Emissions permits trading/Coase, >Transaction cost/Coase. 1. Coase, Ronald H. (1960). The Problem of Social Cost. Journal of Law and Economics 3: 1-44._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Policy of the United States | ||
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