Cap n' Trade

So let's talk about cap and trade a little.

I admit that I'm a little unstudied on the details of it. Here's my understanding:

An American system (which would need to be passed through Congress) would build off an already-implemented European system, with a few updates. In general, though, the principle remains the same: emiting more carbon dioxide (or just carbon? Not sure) than a certain amount (the cap) means that your company would have to buy enough permits to cover the overage. The "trade" part comes in because you can buy permits from other companies that don't have as great a need for them (because they've reduced their carbon output). The idea is that carbon emissions can be regulated with a free market hand, and that can produce more innovative carbon reduction strategies than a straight tax. (Or, the fact that it is a theoretically-free market is just supposed to appeal more to conservative economists - I don't know.)

So that's all pretty straightforward, in relative terms. The real questions are how the to-some-degree-successful European system can be adapted to not only work better (they had a rocky start, for reasons I'll explain) but also to work for the United States, because we're all special people.

One of those questions is how companies get permits to be traded in the first place. My understanding is that the Europeans gave a certain number away and that that caused a lot of problems (because then the prices of the permits were so low that no one needed to cut back to save money). From what I've heard, the possible solution (and also what the European Union is doing now) is to have the government auction a certain number of permits which are then distributed between companies. How that fixes things, I don't know - my knowledge of both the details and economics are a little too sketchy at this point (but at least I admit that). And, of course, it's all conjecture anyway; no one has actually introduced a carbon cap and trade bill, they're just thinking about it.

The other problem that people perceive is one of geography. Right now, there are parts of the country (the interior and South, mostly) that depends heavily on the fossil fuel trade. Texas is huge into refineries and oil. Parts of the country like West Virginia are huge into coal. Much of the power plants in the interior are fossil-fueled. So that's half of the geography equation.

The other half is that a carbon cap and trade bill is supposed to encourage innovation and emissions reduction. The concern here is that a disproportionate amount of that innovation would come from places like California and New York, which would result in more high-tech jobs in those places. So the net effect some people worry about is that jobs would leave some parts of the country (as fossil fuel industries have to shell out more money for innovations or permits) and jobs would be created in other parts (where the innovation is actually going to take place).

In a nutshell, this is why cap and trade seems like such a tough bill to pass through Congress. Not only are the Republicans against it, because they're opposed to it ideologically (but should they be, really?) but the worry is that some Democrats will be against it at well, because it may cost jobs in their states. That would bring the number of people likely to vote for it below 60, which is the supermajority that's become essentially required now because everything is filibustered now because the Republicans are horrible, spiteful individuals that can't see past their own personal aggregation of power to the bigger picture that would save not only their constituents but also the nation (not bitter, not bitter - must remember, Democrats filibuster too, everyone is evil [LINK TO YGLESIAS?]).

Possible solutions? Well, they're thin on the ground - mostly because, in my own, admittantly untutored view, this is more an issue of perception than fact. Leaving out the fact that Republicans have been known to make up crazy facts about bills they don't like (example: the mythical high-speed rail line between LA and Vegas ), there just isn't a lot of knowledge about what cap and trade might do. But the economic crisis has got everyone (a little understandably) shook up, which is why this is generally thought of as A Bad Time To Try For Cap And Trade.

That hasn't stopped the B-man's administration from putting forward the idea that a cap and trade bill could contain multiple regions based on geography - but again, details, no one knows, etc. - and if people have made up their minds that cap and trade is a Bad Idea or this is a Bad Time, then all the logical, wisdom-based alterations in the world probably won't help.

I have no idea why I'm so bitter today. Too much coffee? Too many videos of deniers who, inexplicably, have desks in the Chambers of Congress?

...Sorry. Not bitter. Not bitter. It's been a strange day.

Here's the thing that anyone invoking the geographical question seems to be missing - the effects of climate change, especially in the short term, are also geographically focused. While the global marketplace might spread the effects of things like shocks to food and water systems all over (remember when weather made fast food places take tomatoes off their burgers?), the localized effects will be predominantly in the southern and coastal areas of the United States. And that seems like an important point to consider.