Check Out the “Story of Cap and Trade”

Creators of the “Story of Stuff” released a great video entitled the “Story of Cap and Trade.” It takes a critical look at this market-based mechanism, which is incorrectly touted as the solution to climate change.

Cap and trade schemes are based on setting a limit to pollution. Allowances to pollute are distributed to industries. At the end of the year, industries must turn in pollution allowances equivalent to the amount they polluted. Those that polluted more than the number of allowances they received at the start of the year can purchase additional allowances from entities that polluted less (where the trade comes in). It sounds reasonable enough, but the devil is in the details. The caps are often set too high due to industry pressure, allowances are given away rather than auctioned, and they include a major loophole, offsets.  The use of offsets allow polluters to emit above the cap!

The script draws on International Rivers' cutting-edge work on offsets. Read our reports and blogs on offsets.

And, be sure to watch the video.