Cap and Trade would work like this. The government would require companies to obtain permits that five them the right to emit a fixed amount of greenhouse gases. The limit on emissions would be gradually reduced over years to agreed level.
There are two versions. The government could auction those mandatory licenses, a process that smells like a tax. The Congressional Budget Office figures that government revenues from these mandatory permits could range from $50 billion to $300 billion annually. It would be paid by consumers as higher prices.
The mandated reduction of fossil fuels would drive up prices of anything based on fossil fuels.
Obama, Clinton and McCain favor a bill in one form or another.
The whole Cap and Trade experience in Europe and elsewhere reveals that this is a huge command-and-control operation that taxes, spends and regulates on a grand scale. The "Cap" part rolls back production to an extent that undermines growth. The big polluters, China and India, want no part of such an international plan.
Republicans opponents warned it would impose one of the largest ever burdens on the American pubic, further raising petrol prices.
President Bush has threatened to veto the bill. However, next year, with a Democratic Congress and a liberal president, this albatross might be placed around our necks.