Academic journal article Brigham Young University Law Review

Beautifying the Ugly Step-Sister: Designing an Effective Cap-and-Trade Program to Reduce Greenhouse Gas Emissions

Academic journal article Brigham Young University Law Review

Beautifying the Ugly Step-Sister: Designing an Effective Cap-and-Trade Program to Reduce Greenhouse Gas Emissions

Article excerpt


In his message accompanying the United States 2009 Budget, President Barack Obama noted,

[T]here are the years that come along once in a generation, when we look at where the country has been and recognize that we need a break from a troubled past, that the problems we face demand that we begin charting a new path. This is one of those years.

Our nation indeed faces many challenges.1 One such challenge that has risen to the forefront of both the national and global conscience is that of global warming.

While politicians and the media continue to debate the validity of global warming,2 an increasing number of the world's preeminent scientists believe that "warming of the climate is unequivocal and that the world is in a crisis now."3 Coupled with the fact that President Obama and a majority of Congress are proponents of reducing greenhouse gases,4 the United States may implement an emissions regulatory program in the near future. The United States moved closer to this reality when, in June 2009, the U.S. House of Representatives approved the American Clean Energy and Security Act - a bill that would substantially reduce air pollutants by the year 2050.5

If the United States ultimately elects to lower greenhouse gas emissions, it will likely select from one of two regulatory approaches: either a "cap-and-trade system" or a "carbon tax."6 In a cap-and-trade system, a regulatory body sets a cap on the amount of allowable carbon emissions; rights to emit carbon under this cap are then allocated to the regulated entities.7 Ideally, some entities will need less than their allocable lot, and other entities will require more than what is distributed to them. This creates a market for emission rights where entities that need additional permits to pollute may purchase supplementary units from those who pollute less.8 Carbon taxes, in contrast, are much simpler: they tax pollutants based on their concentration of carbon.9

This Comment argues that a carbon tax is the preferred regulatory approach; however, its political unpopularity makes it an unlikely solution to reduce greenhouse gas emissions. A cap-andtrade system, the ugly step-sister to a carbon tax, is the most probable alternative. To be successful, it must be "dressed up" and include several key components, including (1) a firm cap, (2) a onehundred percent auction of allowances, (3) "carbon offsets," (4) a characterization of carbon in the same manner as a currency, and (5) enforceability.

This Comment focuses, in particular, on the difficult choices policymakers face in determining how to address global warming. Part II provides an overview of global warming. It explains the current scientific research on climate change and discusses the threats that global warming poses. Part III explains United States reluctance to admit that climate change is a problem and why it is in the United States' interest to implement a system to reduce greenhouse gas emissions. Part IV discusses the two leading regulatory approaches to reduce carbon emissions - a carbon tax and cap-and-trade system - and argues that a cap-and-trade system is the most feasible solution. Part V introduces several key components that a cap-and-trade system must possess to be successful, and Part VI concludes this Comment.


Although still highly debated, for purposes of this Comment, I will assume that the anthropogenic global warming hypothesis is valid and that prompt action is needed to curtail human effects on the climate. In analyzing this issue for its validity, it is helpful to review the collaborative efforts of those who seek to draw consensus from the world's scientific community10 - individual reports may provide some insight, but they are less reliable than collaborative efforts.11 This Comment will focus on data and reports compiled by organizations - such as the United Nations Intergovernmental Panel on Climate Change ("IPCC") - that are subject to extensive peer evaluation and scientific analysis. …

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