11-23-2015, 02:19 AM
["Just to be fair and reasonable. I said the US utility users would pay for it and they would get nothing."]
I understand that, but they will in fact get something, the right to pollute an X amount. Before, they could just pollute at no cost to themselves, that is, spread the cost on all of us. Cap and trade is simply an efficient mechanism for letting the polluter pay, and if an efficient market in these permits can be established, it's highly efficient at the margin. That is, those that can't reduce pollution without incurring great cost have to buy permits, those that can reduce pollution fairly easily will do so as long as it's cheaper than buying permits. It's automatically picking the low hanging fruit, by market mechanism.