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Lieberman's climate bill is based on the "cap and trade" administrative method of cutting carbon emissions from polluting factories, such as coal-fired power plants. I regard this a a big business-directed financial scheme.
I've tried to figure out how to explain it but I can't. Understand this, it's complicated, leaky and almost impossible to monitor. It lets "the market" decide, and you know what that means. The consumer gets it in the end.
The other method to fight CO2-polluting industries is to levy what has been called a "carbon tax" on them. Those who oppose the tax –– mainly big business and Republicans –– say, "Who would you rather have distributing the money, the government or the smart guys who run the utility companies, the steel mills, Exxon and Mobil?" Frankly, I don't trust either side.
The feds tried the cap and trade method to reduce sulfur dioxide that was being emitted from Midwestern power plants as a way to combat acid rain destroying lakes and forests in our neck of the woods. It worked. They tried cap and trade in Europe and all it did was increase electricity rates with no resultant reduction in CO2. Think windfall profits.
The part of the Lieberman bill that I'm concerned about is this. In cap and trade, the feds create "credits," or "allowances" that have monetary value which can be bought and sold by industry. That's the "trade" part. I want those "credits" to be auctioned off, not distributed as Lieberman wants to do. He wants to just hand them out. If they're distributed, you know damn well who'll get them. Lieberman's pals. If they're auctioned, they'll go to the highest bidder.
So now I turn to my readers, who I've always regarded as being smarter than me. Well, most of them, anyway. A lot of them. Can anyone explain how cap and trade works? Please use simple language and concepts. I tried and all I got was a headache.