Cap and Trade Calculations

  • Economists say if a cap and trade plan passes, energy prices will go up no matter what (Photo courtesy of aoc.gov)

President Obama and some leaders in Congress want to take on global warming by cutting back on carbon dioxide. The big plan is called carbon cap and trade. If the plan passes, economists say there’s no doubt your bills will go up, though there’s debate about how much. Mark Brush reports on one of the biggest sticking points in these carbon cap and trade plans:

Transcript

President Obama and some leaders in Congress want to take on global warming by cutting back on carbon dioxide. The big plan is called carbon cap and trade. If the plan passes, economists say there’s no doubt your bills will go up, though there’s debate about how much. Mark Brush reports on one of the biggest sticking points in these carbon cap and trade plans:

Under some of the cap and trade plans, oil and gas companies would have to buy pollution permits.

But these companies want them for free.

They say if they’re forced to pay, they’ll have to pass the cost onto you and me.

But economists say if a cap and trade plan passes, energy prices will go up no matter what.

That’s because things like coal, oil, and natural gas will be restriced.

And they say that’s what drives prices up.

Chad Stone is the Chief Economist for the Center on Budget and Policy Priorities.

He says if pollution permits are bought at an auction, the money can be passed onto you and me. But it’s different if they’re just given away for free.

“If you don’t auction, you don’t have any revenue and consumers only get a hit to their budgets.”

Stone says if the pollution permits are auctioned, you could be getting a check in the mail or a tax credit to help you pay for higher energy bills.

For The Environment Report, I’m Mark Brush.

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