Thursday, October 22, 2009

Cap & Dividend OR Cap & Trade?

This Fall, the U.S. Senate began debating their climate change bill. The American Clean Energy and Security Act, narrowly passed by the House of Representatives in June. At the heart of the Senate bill is a cap-and-trade provision. But is cap-and-trade the best method? Many consider cap-and-trade just a hidden tax. If it is a tax, why not just set a carbon tax and avoid the shell game? Below is another alternative.

Whichever version passes the Senate, one thing is sure, it will cost more to emit CO2. This will encourage businesses to find cleaner ways to do things and could be a boon to the renewable energy industry.

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