Cap-and-Trade
by Guest Blogger, 3/8/2005
Cap-and-trade is a method for controlling a variety of pollution emissions by setting an emission standard for polluters and then allowing polluters to trade emissions up to a certain cap. This industry-friendly approach has had moderate success in controlling pollution without putting "undue burden" on industry. However, it is often opposed by environmentalists and public interest groups because while lowering the overall emissions levels, it may increase harmful emissions in some areas.
Hot Spots
By allowing some polluters to actually increase the amount of pollutants they can emit, the cap-and-trade method has the potential to create "hot spots," concentrated areas of higher or even increased emissions. Most pollutants pose a greater risk to human beings when in high concentrations. Therefore, by allowing these hot spots, individuals who live around the site of a pollutant may have an increased risk of negative side-effects.
An example of the hot spot problem is the case of mercury emissions. According to the Center for Progressive Regulation, under the proposed cap-and-trade plan for mercury, the Great Lakes region would actually face local increases in the level of mercury pollution, exposing a greater number of the residents of this region to the harmful impacts of mercury emissions.
Fairness
Not only would the cap-and-trade method potentially expose some people to dangerous levels of pollutants, but this market method would allow individuals who are willing to pay the price pollute more. The burden of reducing emissions would not be equally distributed nor would the risk of harmful effects from pollution. Those who live in the hot spot regions would share an unequal amount of the risk. Therefore, even if the cap-and-trade method does effectively reduce emissions overall, it is fundamentally unfair because it does not equally distribute the burden of the pollution or the benefit of reduced emissions.
Technology Alternatives
Those who oppose cap-and-trade, market-based methods for controlling pollution generally advocate an across-the-board standard in which all polluters would be required to use the best available technology to limit pollution. Under this method, all polluters share the financial burden equally and all citizens benefit equally. Not only is this alternative more fair, but it also reduces the risk of potential hot spots. In many cases, by implementing the best-available technology, industry is able to achieve greater reductions of pollution.
Cap-and-trade has worked effectively in some cases to limit pollution, but it must be balanced with concerns of fairness and of potential hot spots, which could put some groups at even greater risk of undue harm.