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In this video, you will learn about cap and trade and its pros and cons.
#capandtrade #environment #wallstreetmojo #carbontax #greenhousegases
Chapters:
00:00 – Introduction
00:27 – What is cap and trade?
01:43 – Examples
02:35 – Pros and cons
04:46 – Conclusion
What is cap and trade?
Cap and trade is a market-based policy that aims to reduce greenhouse gas emissions. This policy sets a limit, or “cap,” on the emissions companies can release into the atmosphere.
Companies are then given permits, which allow them to emit a certain amount of greenhouse gases. If a company exceeds its allowance, it can purchase permits from other companies with emissions falling below their allotted amount.
Examples
Cap and trade have been implemented in several places around the world.
One example is the European Union’s Emissions Trading System, launched in 2005. Another example of cap and trade is California’s cap-and-trade program, established in 2012.
Pros and cons
Cap and trade have both advantages and disadvantages. One of the main advantages is that it provides a market-based solution to reducing emissions. Additionally, cap and trade can be more flexible than other policies.
There are also some disadvantages to cap and trade. One of the main criticisms is that it can be challenging to set the fitting cap. On the other hand, if the cap is set too low, it can lead to significant economic costs for companies. Additionally, there is a risk of market manipulation or fraud too.
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