Understanding the three goals of the cap and trade energy policy of the Obama Administration, discussion help

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Question #1: Understanding the three goals of the cap and trade energy policy of the Obama Administration, requires we understand the failures of energy policies of the past. Failures by not just American legislative processes, but by the global community at large. As Dye points out in Chapter 12 (Dye, 2013, p. 283-184), the Rio Treaty, Kyoto Protocol, Copenhagen and Cancun Conference have not had their desired impact on reducing energy used, or greenhouse gas emissions. President Obama, who campaigned on environmental issues key to his platform, rode a progressive wave to the White House. President Obama was elected with a mandate to begin to alleviate the tremendous stress corporation’s energy outputs were having on the environment. The President wasted no time after being elected on setting forth an agenda to deal with these environmental issues. In his controversial “cap and trade” policy, the first attempt in our nations history of reducing carbon emissions through economic means is created. It also sees the first attempt, on a mass scale, to provide government subsidies for research and development into clean energy technologies. 

Bye and large, the three goals the “cap and trade” energy policy hopes to achieve are reduction in carbon emissions; placing a cap on total carbon emissions; and reducing carbon emissions by creating a program based upon free/open market principles in which companies would have to pay to pollute, but sell the right to pollute to others if there cap had been reached, therefore companies would eventually invest in carbon reduction. On its face, this policy will have a positive effect on the environment. Holding corporations accountable to the carbon emissions they are producing can have dramatically positive effects on the environment over a 20 year period. What we must question about it, however, is the sustainability in its core principles. Cap and trade will likely have a harmful effect on the poor. According to the Congressional Budget Office, the costs of reducing carbon dioxide emissions would disproportionally harm the poor. A mere 15 percent decrease in carbon dioxide emissions would cost the lowest-income Americans 3.3 percent of their income, but only 1.7 percent of the income of higher income households.  President Obama wants to decrease greenhouse gas emissions by 83 percent, not a mere 15 percent. This will entail much greater economic sacrifice among those who have the least to spare. Even the proponents of carbon taxes, such as Yale University Professor William Nordaus, find that once there is deviation from worldwide participation, the costs of achieving environmental global improvements dramatically rise. Nordhaus’ economic model shows that an overly ambitious and/or inefficiently structured policy can swamp the potential benefits of a perfectly calibrated and efficiently targeted plan. Meaning, that its environmental achievements would come at the cost of severe economic costs. It is a policy that is perhaps too ambitious, as critics will claim, as most plans are that are enacted by President’s elected under clear mandates. Its effects on the economy are a clear indication that the program, even if scaled down to an extent, would have tremendously positive effects on the environment, but must be altered to lessen its negative impacts on those whom its economic impacts would be dire.


Congressional Budget Office, Trade-Offs in Allocating Allowances for CO2 Emissions, Apr. 25, 2007, http://www.cbo.gov/ftpdocs/80xx/doc8027/04-25-Cap_Trade.pdf.

Robert P. Murphy, Rolling the DICE: Nordhaus’ Dubious Case for a Carbon Tax, p. 20, June 2008, http://instituteforenergyresearch.org/wp-content/uploads/2008/06/2008-06_rolling_the_dice_murphy.pdf.


1. The three goals of the “Cap and Trade” policy are 1. Reduce carbon emissions 2. Set national ceiling on carbon emissions 3. Create more energy efficient programs. The cap and trade policy is a good thing. I think it is good that the government wants to be more environmentally friendly.“The ‘cap’ sets a limit on emissions, which is lowered over time to reduce the amount of pollutants released into the atmosphere. The ‘trade’ creates a market for carbon allowances, helping companies innovate in order to meet, or come in under, their allocated limit. The less they emit, the less they pay, so it is in their economic incentive to pollute less (How Cap and Trade Works).” Long term v. short term the cap and trade could be very positive for our country.

The department I work would is highly involved. It is mandated that we (US Geological Survey) participate in energy efficiency. Last fiscal year I was in charge of disposing off all non-energy efficient freezers, and I am in the process of procuring all LED lighting fixtures in our warehouse. We have to submit on an annual basis how we are participating in becoming more environmentally friendly.


(2016) How Cap and Trade Works. Environmental Defense Fund. Retrieved from:  https://www.edf.org/climate/how-cap-and-trade-works


1.  The three goals of the Presidents “Cap and Trade” energy policy include: 1) to allow EPA the ability to set national ceilings on carbon emissions.  2) provide a carbon emissions trading program that encourages industries to invest dollars in reducing carbon emissions 3) make emission compliance a sellable commodity to those who are successful in reducing emissions below its allowance.

In my observation, “Cap and Trade” does not appear to be a plausible solution to Carbon Emissions.  After reviewing President Obama’sproposed program, I am not convinced that this is the best solution to emission control.  That said it is my contention that The “Cap and Trade” approach to reducing carbon emissions should not replace the current regulatory controls.  When I think of emission compliance, the first thing that comes to mind is the Volkswagen scandal last year where Volkswagen of America was accused of cheating on emissions test in its US vehicles.  In this scandal, VW was accused of and admitted to cheating emissions testing on vehicles sold in the U.S.  They were accused of placing a “defeat device” or software in diesel engines that could detect when they were being tested, and changing the performance accordingly to improve results Hotten, (2015).  When you remove regulatory measures from the government and place them in the hands of individual firms, and add the ability for them to (make a profit) by selling allowances to other firms, you open up the floodgates for more cheating and fraud like VW.

How much capital would a program like this really provide since the government would be responsible for putting into place a vast new bureaucracy to “track” the carbon emissions of individual industries and firms.  Without even crunching the numbers, I think the cost would out way the benefits.

2. I do agree that the United States debt and deficit is currently far too large. However, I do not think that the defense budget is an area that could or should be cut.  The most important role of the U. S. government is to adhere to its commitment of protecting the citizens of this great country and providing a strong military creates that protection.  “Currently, American military forces must be prepared to carry out a variety of missions in addition to the conduct of conventional war” (Dye, 2015, p. 334). Additionally, I think that the U. S. still face eminent threats of terrorism therefore, we must remain resilient with the most advanced technological warfare.


Dye, T. R. (2013). Understanding Public Policy, 14th Edition. [VitalSource Bookshelf Online]. Retrieved from https://my-ebooks.bookrenter.com/#/books/9780205973811/

Hotten, R. (2015, December 10). Volkswagen: The scandal explained. BBC News. Retrieved February 14, 2016, from bbc.com

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