There are also a number of folks who believe that, while rising greenhouse gases leading to anthropogenic global warming and other impacts (such as acidification of the oceans) is a serious concern, cap and trade is not the best solution. You can count me in that camp. I am far from convinced that the big winner in this scheme will be the environment. Rather, we are already seeing signs that we will be doing little more than creating a new market for traders and speculators in carbon credits and their derivatives. Just as the trading of renewable energy certificates (RECs) has done little to stimulate new investment in renewable energy, it is unclear that massive trading in carbon credits, offsets, and the like will really get us where we need to be. We did little to regulate the speculative financial instruments that helped lead to the current economic calamity, and it is unlikely that we will have the discipline to sufficiently regulate the secondary markets that will surely arise from GHG cap and trade. You don't have to take my word for it. Michelle Chan, senior policy analyst with Friends of the Earth recently wrote: "If we aren't careful, we could end up creating a massive, poorly regulated derivatives market that not only poses risks to the broader financial markets, but also undermines efforts to save the climate."
Moreover, there is some evidence that the carbon price necessary to induce a significant change in emissions will be far greater than we are likely to see in a trading market for GHG. And, now comes an article by Nathanial Gronewold in EE News that among the biggest winners from pending US climate legislation will be the Big Four accounting firms!
Just what are we trying to accomplish here? Perhaps the simplest and most effective approach would be to return to the age old paradigm of regulation: incentivize desirable behavior and tax undesirable behavior. Better still, if GHG are to be regarded as a criteria pollutant, quit messing around and just regulate it.