Is Cap & Trade the Wrong Policy to Curb Greenhouse Gases for the United States?
by Dr. Michael E. Canes
July 20, 2007
The Marshall Institute recently released its new study, Cap & Trade is the Wrong Policy to Curb Greenhouse Gasses for the United States, authored by Dr. Michael Canes. Dr. Canes analyzes the burdens of implementing a Cap and Trade (C&T) system and concludes that strengthening a goals-based approach presents a more attractive policy option.
U.S. policy for controlling greenhouse gases (GHG) has relied largely on voluntary actions to achieve its objectives. Through 2006, the U.S. is ahead of schedule, having reduced the GHG intensity of its output over the past four years by almost 11%. But a number of C&T proposals have emerged to compel more rapid reductions in GHGs.
Dr. Canes argues that implementation of a GHG Cap and Trade system in the U.S. would be a serious policy mistake: it would impose high costs on the economy; result in volatile prices for allowances and fossil fuels; involve government creation of wealth, creating vast opportunities for "rent-seeking," influence peddling and corruption; and require extensive and expensive worldwide monitoring.