Eoin Wilson on Cap and Trade Regulation
Eoin Wilson
Cap and Trade Regulation
Claims and stances
Transcript
- 0:00 So, what is cap and trade policy?
- 0:03 Um, this is a policy implemented by government typically when there's kind of environmental impact at stake.
- 0:09 Um, let's let me pose an example.
- 0:12 Let's say the government wants to limit CO2 emissions uh out of big automotive industries.
- 0:18 So when they implement this cab and trade, they would first put a cap in.
- 0:21 That's a cap on tons of CO2 uh into the environment.
- 0:25 Um and they would also issue tokens, allowances, chips, whatever you want to call it.
- 0:29 You get just everyone gets tokens, and I'll explain more about this in a bit.
- 0:34 So if a company uh goes over the uh the limit, the cap for CO2, they would have to use their tokens to kind of cover that.
- 0:45 And if they go even further over and don't have enough tokens, then what do they do?
- 0:49 Well, then a company that is more sustainable and is under the limit can sell their tokens to this other company.
- 0:56 Um and so the way they benefit is they don't have to pay, they actually get paid from this other company just for being sustainable, and the other company also complies by paying the other company to get their tokens rather than paying perhaps there's like a CO2 tax that's much higher than what they could buy the token from from the other company.