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Do You Need an MBA to Understand the EPA and Cap and Trade?

If you’ve ever questioned why people buy some of the garbage that they do, then you probably won’t be surprised that major corporations buy and sell waste.

Cap and Trade

Cap and trade is the capitalization of the fear of the greenhouse effect and hopefully a step in the right direction towards the reduction of rampant corporate dumping and polluting. There are several cap and trade programs administered by the Environmental Protection Agency. The cap refers to the limit of emissions that the government sets for companies that produce dangerous emissions as a byproduct of manufacturing. In a cap and trade program, those companies are allowed to purchase emissions allowances and can stock up on them for use over the years.

Online Trading Platform

Companies are then allowed to trade, sell or bank those credits as they see fit. So, if they reduce their emissions, they can make money from their excess credits. Essentially, the “cap” is a mere suggestion for those that can afford to purchase credits to cover massive excesses over the limit. However, as long as the companies continue to purchase credits to cover the excess, then they remain compliant with the program. Is it perfect? Absolutely not, but it is definitely better than industry having free reign to dump into to the oceans and tear apart the sky.

currency trading Do You Need an MBA to Understand the EPA and Cap and Trade? Cap and trade programs all contain basically the same concepts, cap, coverage monitoring, reporting and verification. The cap is assigned by the government and this establishes the amount of emissions that each industry is allowed to produce over the period determined by the program. Monitoring is done by both the industry and the EPA as is the reporting, but the EPA ultimately verifies the data. The most successful of the programs is the ARP or Acid Rain Program. ARP handles the amount of sulfur dioxide emitted yearly. Sulfur dioxide is generally emitted by electric generators that run off of fossil fuels. In two decades, the amount of allowed sulfur dioxide, the cap, has been reduced from 10 million tons to 8.95 tons according to 2010 figures from the EPA.

Recently, the Regional Greenhouse Gas Initiative, a carbon banking program consisting of ten states was in the news. As reported by the NY Times, Governor Christie of New Jersey announced that the state of New Jersey would be the first to withdraw from the program. The move, for many, was obviously political. Cap and trade programs are often a deterrent to business development; by the Governor backing the state out of the program, New Jersey may see further business growth if industry is not restricted by cap and trade programs. Even though Gov. Christie feels that the program is not effective, it has already generated over $700 million for participant states with much of it being invested in renewable energy programs.

Currency Trading

Students working towards their MBA are very familiar with cap and trade. Game simulations of carbon trading have become part of the curriculum from Berkley to Harvard because the system is just part of the cost of doing business. Familiarization of bidding strategies and historical data when dealing with cap and trade can mean the difference between maximizing profit or filling out applications at a fast food restaurant.

Ultimately, cap and trade doesn’t just affect industry; there’s also a large effect on the consumer. Potentially, in the long term, the consumer gains a better place to live, but in the short-term the costs that industry incurs is the burden of the consumer. Carbon credit currency trading inevitably hurts the consumer with higher utility costs because energy producing utilities are harder pressed in keeping emissions lower because of higher demand for their services. That higher demand generally requires that an energy producing utility purchases and banks more credits than some companies in the manufacturing industry.

MBA MBA

An MBA isn’t required in playing the carbon trading game, unless you are working at the executive level in a major industry. The consumer participates in the game, by simply turning on a light in their house or by leaving the television on.