From the excellent Minnesota Public Radio:
…Cap and trade means setting an overall cap or limit on greenhouse gases, and then allowing companies to buy and sell the carbon allowances or credits. Businesses that move quickly to reduce emissions can sell their credits to companies that act more slowly.
The Midwest follows three other regional groups that are working cooperatively to create cap and trade markets. Individual states aren’t big enough to make cap and trade markets work, but regional groupings are.
In Thursday’s agreement, six governors — including Minnesota’s Tim Pawlenty and Wisconsin’s Jim Doyle — and the premier of Manitoba, agreed to create this kind of market. Three other states will help design it, but did not commit themselves to take part once it’s set up.… (read entire article)
Cap and trade (also called emissions trading) is one of the most promising and practical steps to help reduce carbon emissions, though it is not without its drawbacks. A carbon tax is another frequently discussed mechanism to help cut back.
I’m proud to see my state taking such a prominent step. The lack of leadership and action at the federal level is obvious, and it is unfortunate that individual states have had to take the initiative. This is the sort of thing the federal government and the Environmental Protection Agency should be doing; I believe this inaction shows them to be remiss in their duties. It would be remarkable if, despite the ineffectiveness of the Bush administration, the fifty U.S. states could band together to set up their own cap-and-trade market or other effective measure.