Should federal climate change legislation include a price cap to limit the cost industry will pay to buy emission credits?
Legislation passed by the House and being debated in the Senate would require much of the U.S. industrial base to buy emission credits for each ton of carbon dioxide emitted. In the early years, most of the credits would be given to the companies for free to cushion the impact on consumers and give industry time to cut pollution. But many companies say they need a clear idea of the future costs of buying credits. They want the Senate to adopt an adjustable price cap or a "collar" that would set a ceiling and floor price on credits.
Does it make sense to limit emission credit costs? Or does it defeat the effectiveness of the climate change cap-and-trade program?