Is "Cap and Trade" the Best Method of Reducing Carbon Emissions?

If you have watched the news on TV or picked up a newspaper this week there seems to be a new issue on the hot seat. That issue is whether or not establishing a "Cap and Trade" system in the US to reduce carbon emissions is good for the ailing economy and whether or not the system will ultimately help in reducing CO2 emissions.

Included as part of Obama's recent budget plan is an estimated $78.7 billion in new revenue starting in 2012 that would be generated through a carbon emissions trading system. While Democrats have traditionally been more proactive in endorsing legislation that seeks to protect the environment, it seems like there are even Republicans, such as John McCain, who support such a system as long as it is done in an economically responsible manner.

According to the Obama Administration, some of the benefits of this type of system include:

• It is estimated that this program will generate $645.7 billion in new funds that will be reinvested into "clean" energy projects and will help low to middle income families offset higher energy costs.
• This will be the first nationwide system implemented in the U.S. that aims to reduce carbon emissions, which many scientist say are contributing to global warming and rising sea levels.
  
• In order to reduce emissions, this system will encourage carbon emitting companies to reduce their carbon footprint and will hopefully increase investment in clean energy sources.
  
• Some companies welcome the new plan in order to help them prioritize their sustainability initiatives and plan for new business investments in green technology.
  

While there are some potential benefits to this type of system, there are also others who believe that this system is not ideal for the following reasons:

• Many Republicans will likely reinforce the Bush Administration's opinion that this system will cost jobs and increase energy costs for consumers.
  
• Democrats in states that rely heavily on manufacturing and coal production will likely also put up some resistance to this plan in an effort to protect their regional industries and jobs in the current recession.
  
• Obama has also admitted that this plan will likely cause a spike in energy costs and will plan on using $60 billion a year to help offset costs through tax credit programs.
• Some analyst estimate that this Cap and Trade system will cost taxpayers as much as $330 million per year.
  
• Some lawmakers feel the plan will be ineffective in reducing carbon emissions as evidenced by the performance of the current European emissions trading program.
  

Legislation will have to be passed in the next year or so in order for the program to be in place by 2012 and Obama's goal is to see carbon emissions reduced by 84% by the year 2050 from the 2005 levels. This plan will continue to be a source of contention by lawmakers since there are clearly pros and cons on both sides.

So what do you think? Is this plan coming at the right time given our current recession and the potential for increased energy costs and potential for lost jobs? Can we wait any longer in developing a comprehensive, nationwide carbon reduction plan given the environmental concerns we all face?