As the arguments against the reality of global warming become less vociferous under the barrage of scientific data, and the certainty of carbon emissions being the main culprit is grudgingly accepted by even the most outspoken deniers, policy makers are (finally) gearing up to begin taking steps.
Seemingly across the board, experts and legislators alike are warming to the idea of adapting the same type of approach to reducing carbon emissions that became the core of the Kyoto Protocols, that being a system of Cap and Trade.
This system a) places an immediate cap on the growth of volume of emissions, while b) allotting permits to industry which can be traded in a method that (theoretically) would incentivize the steady reduction from the current level of emissions and also provide an economic buffer to minimize negative impacts of these necessary reductions.
As with many great ideas, there are some drawbacks. In the days when many (American) leaders sought to justify the avoidance of signing the Kyoto Protocols, a few of their arguments were the danger of fluctuating value of credits and the likelihood of permit-swapping undermining the actual reduction of emissions, while still placing economic strain on participants. It now appears they may have been at least partially right, as some European countries are finding out for themselves.
Here's what happens: to protect industry from the potentially debilitating rise in the price of carbon credits, the government sets the maximum price at let's say $7.00 per ton. Some companies will find it cheaper to just buy the credits than actually reducing their carbon emissions, while others spend money to actually cut their emissions. But then the price of the credits drops a few dollars, causing more companies to buy the credits instead of doing what we need them to do, which is cutting their emissions.
If you think our legislation will be strong enough to counter this, think again. This White Paper describing the scope of our plan is riddled with statements like:
it is important to design a fair program that obtains the maximum emission reductions at the lowest cost and with the least economic disruption
If emissions from certain activities cannot be measured accurately, it may not be possible to require a regulated entity to turn in allowances to cover those emissions
If this system is to work the way we need it to work, there must be teeth in it. Carbon must be taxed in a way that genuinely pushes industry to clean itself up.
Whether it's a straight-up carbon tax that can only be lowered by lowering carbon emissions, or a method for ensuring that actual reductions are nearly always cheaper than buying credits, or some other method for forcing reductions, we can't play the "as long as it doesn't hurt" game anymore.
It's already hurting us, and it's already costing us more than we (and our children) can afford.