Cap and trade has conservative, Republican origins
“The Trump administration wants to end California’s cap-and-trade program”
By Scott Tong
In the last few months, the White House has tried to undercut California’s ability to craft its own auto emissions rules. It’s gone after automakers wanting to make cleaner cars for the California market. And Wednesday, the Justice Department sued to end the state’s climate change program, known as an emissions cap-and-trade market.
Yep, that’s a mouthful, but cap-and-trade has become an essential tool to reduce carbon emissions around the world.
As the name suggests, cap and trade policy is a two-part thing. First, you set a cap on carbon emissions and give allowances to businesses — basically permission to pollute — that add up to the cap. Then you let companies trade these allowances. If one company doesn’t emit too much and doesn’t need its permits, it can sell what’s left over. Or vice versa.
“It creates the kind of flexibilities that businesses want, in trying to comply with environmental laws,” New York University economist Gernot Wagner said. “Ironically, anything related to climate seems like a liberal idea, but the cap and trade aspect of it has conservative, Republican origins.”