Obama Energy Plan: Pay To Pollute

by Mike Dorning

Presidential candidate Barack Obama hopes to reduce U.S. dependence on foreign oil and combat global warming with a national auction system that would make every company pay for the right to emit smoke and other sources of carbon.

The "cap-and-trade" auction system is based on the idea that the easiest way to reduce the carbon emissions that contribute to global warming is to simply charge a price for pollution. The approach has long been favored by environmentally minded free-market economists who believe that a pollution "price" would reduce emissions more efficiently than complex government regulations.

Under the Obama plan to be formally announced in a speech today, the government would set a national cap on carbon emissions that by 2050 would be reduced gradually to 80 percent of 1990 carbon emissions. The national cap in turn would determine the number of individual carbon allowances available for auction to industry. So the price of a carbon allowance should reach the level necessary to limit emissions to the right level.

The Baltimore Sun, Oct. 9, 2007