CAP-and-TRADE, is it the way to go?

A Cap-and-Trade program to reduce carbon emissions has been in discussion for many years, and even after the Kyoto Protocol it is still not in place. Simply put, this is a program of 'emissions trading' in which governments set an upper limit on emission permits and allow businesses and other organizations to purchase and trade the permits. Through time, the upper limit is lowered with the long term goal of cutting emissions.

So is cap-and-trade the way to go...I'm not so sure. Essentially, it allows developed countries to purchase emissions credits from developing countries, and as a result, the biggest polluters continue business as usual.

Rather than continuing down this dim path, perhaps we should address the root of the problem and incentivize innovation.

Here is an interesting article that goes further into this discussion.

Image Credit:http://nicedeb.wordpress.com/2009/06/26/kansas-city-cap-and-tax-protest/