from Michael in Port Washington, WI:
#172
There is a lot of debate about "Cap and Trade," how will effect energy costs in Wisconsin, and throughout the country?
"Cap and Trade" may have the effect of increasing costs
A "Cap & Trade" will have the effect of increasing the costs of carbon-based fossil energy in Wisconsin as well as in the rest of the country. A "Cap & Trade" seeks to recognize the environmental costs created by the burning of carbon based fuels contribute to global warming. These environmental costs are not currently included or recognized in the market prices for such carbon-based energy sources such as coal, natural gas and oil or in the price of electricity which uses these fuels to generate electricity.
The actual level of increased cost on specific carbon based energy sources or the financial impact on individuals and businesses depends on a variety of factors including but not limited to; (1) the design of the Cap & Trade mechanism especially the level at which the cap is set; (2) the availability of lower cost alternatives such as energy efficiency or renewable resources; (3) how allowances are distributed will they be given out for free or sold by auction thus producing funds to help offset the potential cost impacts and (4) the carbon-intensity of the specific fuel (e.g. the relative impact of a Cap & Trade on more carbon intensive fuels like coal will be greater than on less carbon intensive fuels like natural gas costs).
There are many good sites that provide more information on the fundamental structures and potential impact of "Cap & Trade" including the following site established by the Environmental Protection Agency.
Published Friday, May 08, 2009