Cap-and-trade: tax in disguise

December 18, 2009

The article "How cap-and-trade pays" (Dec. 16) should have been titled "How cap-and-trade plays." The idea behind cap-and-trade is that one party agrees to reduce greenhouse gas emissions in exchange for money that allows another party to increase greenhouse emissions. This makes it more expensive to generate greenhouse gases and more economical to reduce greenhouse gases. The Mid-Atlantic states' scheme described in this article does not do this. It takes money from power plant operators and uses 73 percent of that money to subsidize energy consumers through rate relief and low-income energy assistance.

This does nothing to lower greenhouse gas production and actually encourages energy usage. The consumer is paying less for energy and, therefore, is less likely to conserve. Not only that, but 73 percent of the money collected goes right back to the energy producers, giving them less incentive to reduce greenhouse gas production because it barely increases their costs.

When you take money from one party and use it to provide assistance to lower-income citizens, that is called a tax. How is this a model for the U.S. to limit greenhouse emissions, as the Maryland Energy Administration suggests? This is a great model for taxation, but we have plenty of those.David Plaut, Reisterstown

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