It's On My Tab

Money makes the world go round. Money is always #1. Environmental consciousness, human rights, even the law take the backseat behind profit everyday. We see this in industry. Major American industries such as the auto industry need profit, especially during an economic crisis. The Big Three (Ford, GM, Chrysler) automotive companies lost a market share of over 17% last year, so obviously, lowering carbon emission is not very high on their to-do lists at this point. However, based on Obama's recent carbon plans, market shares and carbon emissions are now hand in hand. It's all because of a little thing called a carbon cap.

When a nation wants its industries to lower their carbon emissions, the nation sets a cap. A cap is a simple number: the maximum amount of carbon that can be emitted by an industry according to government and EPA standards. Industries must abide by this. Nothing else can be done. Except...credits.

So let's say that a company is producing 300 tons of CO2 emissions per day (This is completely random and innacurate). Then Obama issues a cap of 250 tons per day (Again, hypothetical). Now what? Well, the simplistic one would say, "Just lower CO2 emissions!" However, minimum calculated production rates can be achieved by 300 tons per day, and 250 is impossible for the company, if they want to stay on the positive side of the revenuew spectrum. So to accomadate for this, there is a system of credits. Credits are basically passes allowing a company to emit a certain amount of CO2. For this example, lets say one credit is 50 tons, so this company now has 5 credits as issued by Obama's cap. But they need 6 credits, so they trade with company B down the road, who only emits 200 tons per day and therefore has a leftover credit. This system is called emissions trading, in which industries trade credits to allow them to emit more. Seems perfect, right? There are some holes though. This is not applicable internationally, because caps have to be mandated by central governments. Also, credits and expensive, so although this is a major incentive to just lower emissions instead of buying more, in the cases where credits are a necessity, it can really hurt a companies budget. For now though, caps and credits seem like a pretty feasible plan for the US.

HAVE you done something GREEN today? Start now.