Does CARB???s Cap-and-Trade Program Go Too Far? (ContributorNetwork)

COMMENTARY | California politicians are determined to put the Golden State on the map for emissions trading and decreased greenhouse gas emissions. The ambitious cap-and-trade program is supposed to make it possible -- at a cost too high for California consumers?

California's Cap and Trade Program

Brainchild of the California Air Resources Board, cap and trade's first phase goes into effect Jan. 1, 2013. Energy-generating businesses that produce in excess of 25,000 metric tons of any "carbon dioxide equivalent" must purchase carbon credits to offset their greenhouse gas emissions. Trading of these credits is possible, as is bidding for allowances. So what could possibly go wrong?

Will Industry flee or stay?

Since California is the first state to embark on a go-green program of this magnitude, it is anyone's guess if businesses will sink or swim. If the cost of carbon credits -- or the bother of emissions trading -- sends companies out of state, California politicians are sure to take note that cap and trade failed.

On the other hand, if businesses weather the increased costs and either do not pass them on to consumers -- or only do so at greatly reduced prices -- there is a chance that the Golden State's ambitious emissions trading program becomes a resounding success. In this case, the gamble that the state will spearhead go-green technologies and innovations is sure to pay off.

Should California play Canary in the Coal Mine?

Can a state with high unemployment and foreclosure numbers afford to become the proverbial canary in the coal mine? CARB is clear in stating it has no clue how cap and trade will affect industry or the consumer in the long run; in fact, it predicts the possibility of "unintended economic or environmental consequences." Should a corporate mass industry exodus occur environmentalists should get ready for a new moniker: job killers.

Then again, if businesses play ball and the overall fossil-fuel cost for the consumer -- and secondary businesses not directly affected by cap and trade -- is kept reasonably steady, green technology may just be the next dot com boom (hopefully without the bust). If this sounds like a whole lot of 'ifs' to you, you are not alone.

California conservatives and refiners have already made it clear that they are not in favor of cap and trade. How they will react -- apart from saber rattling -- determines the program's success or failure.

Source: http://us.rd.yahoo.com/dailynews/rss/environment/*http%3A//news.yahoo.com/s/ac/20111026/us_ac/10290327_does_carbs_capandtrade_program_go_too_far

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