A “fee and dividend” system would implement that a uniform fee would be set for each fossil fuel being brought in by a company. At the point of entry or mine of the fossil fuel, the company harvesting it would be required to pay a certain amount of dollars per ton of carbon dioxide in the fossil fuel (coal, oil, gas). The more carbon is emitted from the product, the higher the price the public would have to pay to purchase said product. The collected fees would then be distributed to the public, and the consumers that choose less-polluting goods on average would receive a greater dividend. NASA’s Jame Hansen is a proponent of the “fee and dividend” system.
“Cap and trade” is unlikely to produce meaningful emission reductions. The “cap and trade” system is market based. Polluters are able to find loopholes in the system, by claiming that since their plant has been around longer than the laws, they are exempt from paying the fees involved (just one example). Cap and trade is enforced through the selling and trading of permits, thereby perpetuating the pollution it’s supposed to eliminate. “If every polluter’s emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear”(http://www.nytimes.com/2009/12/07/opinion/07hansen.html?_r=1). Basically, the cap and trade system doesn’t solve anything, because it allows smaller power plants with lower carbon emissions to “trade” their credits with bigger power plants, in order that they can continue burning fossil fuel without paying ANY additional fees. Supposedly its meant to level the playing field, but really its just another mask for polluters and their supporters to hide behind.
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