Underlying the cap-and-trade approach to reducing greenhouse gas emissions is a
ID: 111216 • Letter: U
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Underlying the cap-and-trade approach to reducing greenhouse gas emissions is a simple idea that the market place can be a powerful tool for achieving environmental progress. In the program, the camp is a legal limit imposed on the quantity of greenhouse gases that company, region, or country can emit each year and trade means that companies, regions, or countries that emit Greenhouse gases may buy and sell the permission, or permits to emit greenhouse gases up to the overall cap among themselves. The net effects are that as the cap declines over time the total emissions are forced to decrease and, in the trading process, overall costs of abatement are reduced. Figure 2 is a schematic depiction of how a cap-and-trade system works after it is up and running. To start the system, government at some level sets the target, or cap, on how much pollution (eg., CO_2) a business sector for region or country is allowed to emit into the atmosphere. The cap places a legal limit subject to enforcement on how much greenhouse gas that significant policies can emit. The non-governmental market place then is left to figure out how to achieve the target at the lowest possible cost. With common-sense rules set in place, the competitiveness and ingenuity of the marketplace reduces emissions as smoothly, efficiently. In Figure 2, The company at the right was able to reduce its pollution below its cap. This put the company in the position of being able to sell its excess credits in the market place. In the figure, tan puffs denote pollution units and blue puffs depict credit units. It is evident from counting the arbitrary number of puffs in the figure, the company at the right had a cap of 5 pollution units, but it had reduced its pollution to the point that it had _____ credits it could sell.[] 2 [] 3 [] 5 In Figure 2, the company at the left did not or could not achieve its pollution cap of 5 pollution units (shown by the 5 tan puffs under the cap) as it was exceeding its emissions cap. By the company on the left buying credits for the excess emissions, both businesses could meet their legal obligations. Figure 2 shows the cap on emissions as decreasing over time. This drives companies towards adopting clean technology infrastructure as the diminishing number of pollution reduction credits causes individual credits to become more costly (the concept of supply and demand). This gradual lowering of the cap allows time for the market place to find the lowest-cost alternatives to meeting the new emissions caps, minimizing the overall costs of compliance. Cap-and-trade systems are not new. The U S Environmental Protection Agency (EPA) claims considerable experience developing and implementing cap and trade systems for other environmental problems. For an overview of EPA's cap-and-trade programs, go to: http: //epa gov/captrade/index html There, under Quick Links, click on "Acid Rain Program." The EPA reports that perhaps its most successful cap-and-trade program has been the Acid Rain Program. Its overall goal is to achieve significant environmental and public health benefits through reductions in emissions of sulfur dioxide (SO_2) and _____, the primary precursors of acid rain. [] nitrogen oxides (NO_X) [] ozone (O_3) During the operation of the Acid Rain Program's cap-and-trade system, the atmospheric concentrations of those gases causing acid rain were dramatically reduced. For example the ambient air sulfur dioxide concentration in the U.S. declined 56% between 1980 and 2008.Explanation / Answer
Question 4: Answer : 3. Explanation : there are 3 blue tuffs onto the right side. It means that they can sell these credits. Question 5: Answer : nitrogen oxides (NOx) Explanation : Nitrogen oxides and Sulphur oxides from the combustion of fossil fuels are the precursors to avoid rain.
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