Carbon Trading

So what is Carbon Trading? (Searching Wikipedia…)

Emissions trading (or cap and trade) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.[1]

OK! This sounds good. Reading on…

In such a plan, a central authority (usually a government agency) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups that emit the pollutant are given credits or allowances which represent the right to emit a specific amount. The total amount of credits cannot exceed the cap, limiting total emissions to that level. Companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances or face heavy penalties. This transfer is referred to as a trade. In effect, the buyer is being fined for polluting, while the seller is being rewarded for having reduced emissions. Thus companies that can easily reduce emissions will do so and those for which it is harder will buy credits which reduces greenhouse gases at the lowest possible cost to society.

Hmmm. Let me see an easier analogy. We can call it Calorie Trading. In this world, there are people who are overweight (who cant stop consuming), and they are people who are underweight and those who exercise to maintain weight. But, in this homogeneous flat world, we need all of them at the same weight (either by consuming less or exercising – this method will ensure that overweight people will become normal – oh the controlling agency, the govt, cares about the health of all its citizens and all citizens should be a certain weight for great health benefits). But those who cant consume less, can “trade” with folks who can exercise more than they already are. So, in effect the overweight people will pay over-exercising people, so that they can over consume.

Now it makes sense. This calorie trading will take care that the population will remain healthy!

Whoever thought that carbon trading will save the world should be given a Nobel Prize! So many corollaries are possible! You bet, Calorie Trading is going to be a top one!!! Anyone willing to give me money, I will exercise ….let us begin the calorie trading revolution.

Think about it. You eat all you want. I exercise and together we can maintain a constant weight! You need to cough up some serious dough though. Thus both of us reap benefits in the long term. Genius.

One Comment to “Carbon Trading”

  1. great piece on carbon trading…

    cheers Nalin

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