Can a carbon market help shrink the national debt?



  1. 0 Votes

    Possibly, but an emissions trading scheme or carbon market is not really designed to do that. The purpose of a carbon market is to provide an economic incentive for businesses to reduce their greenhouse gas emissions by quantifying actions they can take to reduce them–for example, by capping landfills to reduce methane emissions, or adopting silvicultural and sustainable forestry practices for corporate-owned timberlands. Companies can then take these carbon offsets and trade them on an open market, for example to other companies that can’t afford to create reductions of their own in the same amount. Though likely regulated through some quasi-governmental body (such as carbon markets typically are in Europe), a carbon market would be primarily for the benefit of private businesses. Where I could see some deficit reduction potential is if the federal government creates its own carbon offsets–perhaps by reducing the carbon footprint of federal agencies or other operations–then selling carbon credits and using the money to retire debt instruments. This isn’t the main point of a carbon market however, though nothing would preclude it from being in used in this way.

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