Economics and Government

After writing the last policy analysis on global warming am still confused weather I should pick neither carbon tax nor cap-and-trade. I understand that we should keep our city clean to reduce pollution. An article in The Associated Press on April 24, mentions that electricity providers warn plan would raise prices if the Congress passes a global warning bill without giving utilities some allowances to emit greenhouse gasses. I would be worry just because the Utilities where we lived are monopoly, I’m not sure if everyone in town are able to afford gasses or electricity during the winter season. President Obama proposed that providers says the best way to keep the electricity sector from passing on the cost of reducing greenhouse gasses is to initially give away allowances to emit pollutions, not sell them. The president’s budget assumes that allowances will be sold and uses the projected $650 billion in revenue to help people pay for higher energy cost and to develop new, more climate friendly energy sources. Its sound nice but I’m sure a lot of people out there are not agree to this plan because of using tax money to pay for someone else. Most of the electric utilities told the lawmakers they if they were giving the allowances, they could protect consumer from higher energy prices. I believe that this is another example of why Cap and Trade won’t work. The industries will just use the political pressure to ensure they have sufficient free pollution certificates that they don’t have to do anything. As for carbon surcharge with reductions in the income and payroll taxes are needed so that the consumer can afford to pay the higher fuel prices, rather than just put the money in energy companies.