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Cap and Share gaining ground

A quick look at some recent news on capandshare.org suggests that Cap and Share is starting to gain significant support as an economic tool for reducing carbon emissions. (Cap and Share was -shares.html" target="_blank">discussed at length in Construct Ireland in 2007 by Richard Douthwaite, and is described here in detail. This diagram is also useful in explaining the concept.)

In November last year, well known environmentalist and writer Bill Mckiben wrote an article calling on US president-elect Barack Obama to introduce a Cap and Share style system.

In October, the Washington Post called for a Cap and Dividend (also called Cap and Return) system to be in introduced. Such a system is very similar to Cap and Share, and according to capanddividend.org, would work as follows:

"The cap can be admministered by requiring the first sellers of oil, coal and natural gas to buy permits equal to the carbon content of their fuels. Once a year the companies would 'true up' and pay a stiff penality if they don't get enough permits. No other businesses would need permits, and no smokestacks would need to be monitored.

Dividends. When fuel companies buy permits, they’ll pass that cost along to their customers. This is as it should be: the cost of emitting CO2 needs to be paid by energy users. By adding this currently ignored cost, we’ll shift private investment away from fossil fuels and toward efficiency and clean energy."

Higher fuel prices have a downside, however: they take lots of money out of everyone’s pockets. The trillion dollar question is, where does that money go? In traditional cap and trade, the extra money we pay goes to companies who receive free permits. Under cap and dividend, by contrast, it flows into a not-for-profit trust. There it’s divided into equal shares and wired to every American’s bank account or debit card. This happens monthly and automatically. As the price of carbon rises, so do the dividends everyone receives. And no large bureaucracy is needed."

In September 2008, An Tasice's governing body also endorsed Cap and Share, while in July Barack Obama proposed a similar system in Rolling Stone magazine, saying:

"If we institute a cap-and-trade system for carbon emissions, that's going to generate billions of dollars. Now, that's also going to mean higher electricity prices for consumers, so a huge chunk of that has to go back to consumers in the form of rebates, so they don't feel the pinch as badly. That's point number one."
Update: Newsweek has jumped on the Cap and Dividend bandwagon.
Last modified on Tuesday, 13 January 2009 17:51