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Cap and Trade

Yet another term being thrown around the business news is Cap and Trade. What does this mean? The Cap is the limit that large companies will have on the amount of greenhouse gas they can emit. The Trade is that since some companies can reduce their emissions more cheaply than others, a market will be created where companies can trade their right to pollute.
Sounds pretty straightforward. But as with many new taxes, there’s an unintended consequence. The added cost these companies will have to bear will be passed along in increased cost to the consumer. As the Congressional Budget Office estimates, The middle 60% of income earners will see an increase in their expenses ranging from $880 to $1500 per year. This is the group our president promised not to tax more heavily. This isn’t a tax directly on the consumer, but one that will have the same impact.

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