Can cap and trade work in the US?
9 October - 24 mins
Podcast Series
Planet Money
Recently, the state of Washington embarked on an ambitious new plan to combat climate change. Taking a page from economics textbooks, the state instituted a statewide "cap and trade" system for carbon emissions. The state establishes a cap on the total amount of carbon pollution it is willing to allow each year, and then gives away or auctions off carbon emission permits that add up to that total. Companies can then trade those permits on the open market.
Economists love cap and trade plans because they establish a limit on carbon emissions while letting the market find the most efficient way for decarbonization to occur. But cap and trade has had a hard time catching on, especially in the...
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