Carbon Cap and Trade Research Paper Example | Topics and Well Written Essays - 750 words

Carbon Cap and Trade - Research Paper Example Watch CO2Â  Now.org, the annual trend of CO2 emission has been on the rise since 1959 when the amount of CO2 emitted to the atmosphere was 315.97 ppm. In 2014, the amount had spiraled to 398.55 ppm. As such many countries have joined in the race to reduce the rate of carbon emission into the atmosphere by enacting environmental policies aimed at cutting down the volume of CO2 released into the atmosphere through human activities and oblige to the Kyoto Protocol. Having gone through an introduction to the state of global CO2 emission, it is prudent to look at policies countries are implementing to reduce the rate of CO2 emission into the atmosphere. This paper focuses on Carbon Cap and Trade as a means of reducing the emissions of CO2 through human activities. Cap and trade refers to an environmental policy mechanism that achieves its mission by imposing mandatory cap on carbon emissions. According to this mechanism, a regulatory body, for example, the federal government, device and puts a cap on the acceptable volumes of emission of a pollutant (CO2) for specified polluters such as manufacturing companies. The overall amount of permissible emissions under the cap is apportioned into single permits. Emission permits are permits that give polluters the right to emit certain ton of CO2 into the atmosphere. Each permit gives the authority to emit a given volume of the pollutant. These permits are then distributed to polluters covered by the program. The cap specifies the maximum amount of tons of carbon that a polluter is allowed to emit. The cap limits the number of permits that can be issued to polluters, thus making the permits financially valuable items that can be bought and sold in an open market. Consequently, companies that are capab le of lowering their emissions at cheaply can sell their surplus permits to companies with high cost of reducing emissions. This approach offers companies the freedom to choose how to meet their emission targets. However, market