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Cap and trade is touted as a method of reducing greenhouse gas (GHG) emissions based on:
* capping the amount of GHGs that a plant can emit (in total tonnes/yr) with a declining permitted amount over the following years. * emissions in excess of the permitted amount cost the firm a fee (say $10/tonne) Assume the company can either pay the fine or put in pollution control equipment which would remove GHGs at a cost of more than $10/tonne.
What is supposed to happen next is that another firm which will be below its permitted emission rate will step up and sell the "hole" for $8/tonne, making money for themselves and saving the first company $2/tonne. Alternately if the first company can put in a GHG control system at the second company for less than one at their own plant site they will do that and claim the reduction for themselves.
What I have seen happen is that, since this activity looks more like commodity trading than pollution control, the company's trading staff get involved instead of the environmentalists and engineers. You soon have a futures' market in GHGs - big bucks to be made by all.
Except the purpose of the program is to reduce GHGs not play with them. Furthermore all nations need to "play" to make the system work. China and India for their own economic interests, especially in the current worldwide collapse, have indicated they will not participate. This directly increases their economic competitiveness relative to any nation that participates in this system and will cause migration of jobs and production to non cap-and-trade nations. In addition the costs of administrating and monitoring this international bureaucracy would have to be substantial and would be unwieldy.
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∙ 15y ago
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A 10-state effort to reduce carbon dioxide emissions includes what kind of auctions?
sturm and drag! or cap and trade or put and call. but i dont know
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Trade equity and rebates are both forms of "cap cost reduction". The initial capitalized cost (cap cost) would be the selling price of the vehicle. You can add to the cap cost with things such as acquisition fees. You can reduce the cap cost with things like downpayment, rebates and trade equity.
What is mean by hand cap?
any hand cap
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The idea that countries can only become rich if they trade is called?
cap
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a cap / a baseball cap
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Why is cap and trade being proposed?
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What does trade and trade routes mean?
no
What does a no cap season mean?
a no cap season means to not make fun of someone for that season
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Spain
What does the prefix cap mean?
m
Wool cap with MEOW on the front what does it mean?
A wool cap with the word MEOW on the front does not mean anything other than the wearer likes cats.
