What is Cap-and-Trade?

Cap-and-trade systems, also known as allowance trading, can be best summed up as "pollution credits."

What happens is that overall air quality goals are set for an area (such as the entire nation) and specific sources of air  pollution (such as power plants, waste incineration facilities, etc.) are given a certain number of allowances, which represent the amount of various pollutants that the organization or facility is allowed to emit.

Facilities that come in under that allowable limit because of air pollution control systems can then sell their leftover allowances to other facilities and organizations on the open market.

This allows the facilities that buy up such allowances (pollution credits) to pollute more, because other facilities are polluting less.

In theory, the system does have some potentially good points, by rewarding facilities that control air pollution and providing a means for those who cannot afford the latest air pollution technologies (or who have not completed upgrades) to buy some maneuvering room.

A big problem with cap-and-trade systems is that they allow for certain parts of the country to become much more polluted than they should be. Overall air standards in the nation might be met, but people in some parts of the country get horrible air quality as a result, and this isn't fair...or healthy. Again, this is a problem caused when cap-and-trade systems are left too open-ended, which is generally the case.

Cap-and-trade regulatory models have been effective in decreasing emissions of certain pollutants, due to their typical dispersal patterns or lower toxicity. But for mercury, it's a different story. Because mercury emissions tend to concentrate nearer their source than do some other air pollutants, a cap-and-trade program may result in harm to children in certain communities where high mercury emissions would be allowed to continue or to expand. And with mercury, the risk isn't just the air pollution; it's the fact that the highly toxic metal settles from the air into the waterways, and ends up in the tissues of fish that we consume.

The cap-and-trade programs that have been proposed by the EPA may not address existing "hot spots" of mercury pollution and contamination, and may create new local hot spots for mercury, disproportionately impacting local communities, especially those depending on subsistence fishing.

A decade-long study sponsored by the EPA, the U.S. Geological Survey, and the State of Florida in 2003 revealed that strong regulations of airborne mercury emissions produce swift, dramatic improvements in mercury contamination in local fish tissues. After south Florida waste incinerators were required to reduce their mercury emissions by 90% (they actually achieved 99% reduction), mercury levels in Everglades fish and wildlife declined by 60% in just 10 years. This study illustrates the feasibility of these measures to protect public health and how strong pollution controls are an effective approach to cleaning up the local environment and protecting public health. [Source: Florida Department of Environmental Protection. "Integrating Atmospheric Mercury Deposition and Aquatic Cycling in the Florida Everglades: An approach for conducting a Total Maximum Daily Load analysis for an atmospherically derived pollutant," Integrated Summary, Final Report. October 2003. www.floridadep.org/labs/mercury/index.htm]

You can view the U.S. Environmental Protection Agency's definition of cap-and-trade, which ignores the negatives of the system, by clicking here.