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Proponents of a carbon cap and trade market have contended the following: given that sulfur cap and trade has been economically efficient, let’s emulate this model with the creation of a carbon cap and trade market. This argument, however, is strictly theoretical. In other words, it disregards the difference in size between what would be a large scale, far reaching carbon cap and trade market, and an inherently small scale sulfur cap and trade market. Today’s functioning sulfur dioxide program only targets 445 power plants, whereas a predominantly carbon based, greenhouse gas emissions cap and trade program would target millions of sources.
According to the Institute for Energy Research, a carbon cap and trade market would cover a variety of emitting sources, including: “electricity production, planes, trains, automobiles, ships, home furnaces,” etc.
Regarding the cost differential between sulfur trading markets and carbon trading markets, the Institute for Energy Research goes on to explain;
….many low-cost sulfur control options existed when the program took effect. This is not the case with carbon dioxide control technologies. There are no control technologies that are commercially available at commercially-competitive prices.
The Institutive for Energy Research then clarifies:
Indeed, the cost-effective way to reduce carbon dioxide emissions is to use less energy. But energy is the lifeblood of the economy. Energy allows us to do more work with less time and effort. As a result, there is a strong correlation between energy use and economic prosperity.
Suffice it to say, although the U.S.’s small scale sulfur trading market has been economically efficient, a carbon cap and trade market would inevitably produce economically negative, unintended consequences. A federally regulated carbon cap and trade market would sever the U.S.’s ability to propel and sustain its currently high levels of productivity and growth; and at a steep cost. Therefore, it would be economically imprudent to rush to implement a carbon cap and trade system on the basis that sulfur cap and trade has been successful. When comparing the two, size matters!