In this interview with Fresh Air’s Terry Gross, author and editorial director of the Center for Investigative Reporting Mark Schapiro explains Cap-and-Trade legislation: its drawbacks, its benefits; and what it means for the future of the planet.
From Fresh Air with Terry Gross (transcript by NPR):
Mr. MARK SCHAPIRO (Journalist): So the basic idea behind cap-and-trade is that the government issues emission limits, limits on the amount of greenhouse gases that major industries can omit into the atmosphere. And then it permits companies to exceed those limits, to go and purchase an offset somewhere else. Now, what is an offset? An offset is something that basically is a project to reduce emissions in some other part of the world. Let me give you an example.
You have got a major German utility for example. Every year they are issued an emission limit, literally a number as to how many greenhouse gases they can omit into the atmosphere. They have a huge complex, it’s actually called RWE, the biggest utility in Germany. And they have a complex in their headquarters which literally gives them a reading every day as to how many emissions their utility is omitting. And every month they have an exact reading of how far over their limit they’re going.
And so that company has to go out and buy these things called offsets, which are essentially investments in what are emission reduction projects, somewhere else. So you have got a system called cap, which establishes the caps, the limits on emissions, and trade, meaning you can go obtain emission reductions somewhere else to allow you to continue polluting at home.