Discussion: Economic Reasoning

Discussion 3 Economic Reasoning Cap and trade involves capping the greenhouse gas emissions limit beyond which industries have to pay penalties. The total amount of the cap is split into allowances. The trade part involves companies buying and selling allowances that permit them to emit only a certain amount. I concur with sale of allowance market permits because it encourages industries that cut their pollution faster to sell allowances or bank then for future use. This increases the pool of capital available to make reductions and encourages innovation to cut pollution. The Obama administrations 2020 Climate goals are in my view unmanageable. The approach has been criticised for being ineffective and too costly. First the approach is focused on the domestic economy and therefore introduces an incentive to increase emissions abroad as a result of production shifting to countries with less stringent policies. Domestic focus can lead to inefficientallocation of resources through international trade and foreign direct investment. Such a shift is likely to cost the American economy in for of lost production and jobs. Y, dXiJ(x( I_TS 1EZBmU/xYy5g/GMGeD3Vqq8K)fw9 xrxwrTZaGy8IjbRcXI u3KGnD1NIBs RuKV.ELM2fi V vlu8zH (W uV4(Tn 7_m-UBww_8(/0hFL)7iAs),Qg20ppf DU4p MDBJlC5 2FhsFYn3E69 45Z5k8Fmw- dznZ xJZp /P,)KQk5qpN8KGbe Sd17 paSR 6Q