why carbon cap&trade can work

[greenman3610]

http://www.nytimes.com/2007/03/28/business/28leonhardt.html?n=Top%2fReference%2fTimes%20Topics%2fPeople%2fL%2fLeonhardt%2c%20David

At dozens of the nation’s fisheries, the fish population is in danger because fishermen have no incentive not to take everything out of the water that they can. But 10 fisheries, stretching from the halibut fishery off Alaska to the surf clam industry in New England, have tried a different route.

They have capped their annual catch and then granted fishermen the right to a certain share of that catch. The fishermen can buy and sell these rights among themselves, creating a market that rewards the most efficient companies. The fishermen also have a stake in the long-term health of the fishery, as it will dictate the value of their fishing rights when they retire.

The new study is important because it shows that the benefits aren’t just hypothetical. At the 10 fisheries, there are fewer fatal accidents than elsewhere and the fish populations are healthier. The fact that halibut has returned to restaurant menus in the last decade is a direct result of these cap-and-trade programs.

All of the climate bills in Congress revolve around a similar idea. The government would cap greenhouse-gas emissions and issue tradable permits, each giving power plants the right to pump out a set amount. The plants that did the best job of reducing their emissions could then profit by selling unused permits to inefficient plants. A similar system put in place during George H. W. Bush’s presidency reduced acid rain much more quickly than economists had predicted.

[MasonJar]

1. I know that I am being dense, but how does allowing inefficient

factories put out more gas help the people in their neighborhoods?

[XemaSab]

2. Carbon dioxide is not considered a "pollutant" with localized effects

If a factory is pumping out say, soot, the soot will hurt people in the neighborhood directly, and people further away not so much. Carbon, on the other hand, will affect everyone in the world equally, and not just people who live locally.

This is why cap & trade would work well for carbon but poorly for soot. If you cap & trade carbon, everyone benefits, but with soot, the people who live near the still-polluting factory are still screwed.