Cap and trade
Emissions trading, or cap and trade, is a market-based approach that uses economic incentives to reduce carbon emissions. California has recently enacted such a program. Factories, power plants and other large polluters receive permits that limit, or cap, the amount of greenhouse gases they are allowed to emit without penalty. These caps become more stringent over time, allowing less and less pollution, until the ultimate emissions reduction goal is met. The companies that are able to reduce their emissions below allowable limits can sell, or trade, their extra permits to companies that are unable to reduce emissions as easily. Opponents claim emissions trading will likely increase costs to industry and consumers. Supporters claim cap and trade systems guarantee a set level of overall reductions, reward the most efficient companies, and ensure the cap can be met at the lowest cost to the economy. Cap and trade would also create a substantial revenue stream if the government decides to auction emission permits to companies required to reduce emissions. Advocates suggest this revenue could be used to mitigate problems caused by climate change. They also say this cap and trade program is similar to the emissions trading program enacted by the 1990 Clean Air Act to reduce sulfur emissions and reverse the effects of acid rain. This goal was met at a much lower cost than either industry or government had predicted.

Similar in effect to a cap and trade system, some have proposed enacting a cap and dividend system which would require companies that extract or import fossil fuels to purchase a permit at a government auction for every ton of CO2 these fossil fuels will emit into the atmosphere. The revenue from these auctions would be paid out to everyone with a valid Social Security number, much like the way Alaska pays out oil sharing revenue to its residents. Supporters say these costs will de-incentivize companies from using dirty energy while supporting economic growth.

Pending Legislation:
H.R.1027 - Healthy Climate and Family Security Act of 2015

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Poll Opening Date
May 21, 2020
Poll Closing Date
May 27, 2020

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