The NYT reports that several major corporations are now getting behind the idea of setting emission caps. The basic idea is that companies would need permits to emit carbon dioxide. These permits would be tradable, so that companies that managed to reduce their emissions could profit. The key issue here is how the permits are issued. Are they handed to polluters? This is the same thing as handing them money. Alternatively, they could be auctioned off. In this way, the government would collect revenue which could be used to offset the impact of higher prices on consumers. The NYT article didn't say anything about this issue, presumably because the companies didn't raise it. But, these permits will control the flow of tens of billions of dollars each year (real money). The public should know where it is going. It is their money.
--Dean Baker
