My problem with cap and trade

A major debate within the community of environmentalists is whether “command-and-control” style government mandates and laws are the best way to accomplish environmental protection, or whether the goals would be more efficiently pursued through “free market” systems, such as cap and trade programs for carbon emissions, or a tax on pollution. While I will agree that free market systems are enticing on their face (more freedom of how to solve these problems, rather than a standardized order to fix problem X through process Y), they belie a moral element that is rarely discussed in this context.


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If you steal something from a store and are caught, rarely if ever are you given the choice to simply pay for it and go about your business. But why? After all, if you pay back the value of the goods, the end result is the same: the shopkeeper has the money, and you have the goods. There was merely a different path of reaching that outcome. The answer is that we as a society have agreed that it is about more than compensation, there is a moral element too. You must be punished for your disregard for the property and rights of another.

Bring it back to the issue of carbon emissions. If I run a coal plant in 2016, there is little reason to think that I am unaware of the damage I am causing to those around me and to the ecosystems of our planet. The data is out there, there are people making noise across the planet about the terrible effects of particulates, mercury and other pollutants released by coal plants. However, my plant is chugging away.

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By instituting a tax on my emissions, or by requiring me to purchase emissions credits under a cap and trade system in order to continue polluting, you’re inconveniencing me, but the moral dimension is entirely removed from the equation, much like only charging a thief the market value for the stolen goods. Indeed, I may now more brazenly pollute, because in my mind I have paid for the right to do this. Where does Joe environmentalist get off telling me that I’m killing the planet? I paid my tax, I bought my credits. I’m done.

By allowing corporations to purchase these cap and trade credits, or to pay carbon taxes, we are not sending the same message that we do if we are to institute fines or mandates (which come with associated moral judgment). Ultimately, the results may be similar, but it will be hard to transition dirty industries into the clean future until they acknowledge that their behavior is more than an inconvenience they can spend away, but a morally questionable offense on the well-being of our society.