President Obama today announced support for the energy bill in Congress, stating we have an obligation to future generations to deal with the crisis and, you know, create some jobs in the process. How?
The concept is basically cap-and-trade, which means creators of carbon emissions above a certain amount would have to buy or trade emissions credits from someone below a certain amount. This would create a new market for carbon that could reach into the trillions within a few years of implementation. The hope is this will reduce carbon emissions by 17% by 2020 (compared to 2005 levels) and 80% by 2050. In theory, the economic incentive to reduce emissions will create a new green energy business boom.
For the consumer, this could mean in increase in prices of energy, food, and manufactured products (like cars). On the other hand, a decrease in pollution could have net health and economic benefits. The bill still has to make it through Congress and, we expect, many compromises will be made. As it stands, the net impact on the average household is supposed to be $175 a year by 2020, with rebates available for poorer families. Those on the right say it's a tax on turning your lights on, those on the left say it's a weak bill. We'll see. [San Jose Mercury News]
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