The US Environmental Defense Fund (EDF) has been at the forefront of the push for tradeable pollution rights, now renamed as emissions trading, and the Natural Resources Defense Council (NRDC) has also supported them.
The Business Roundtable created the Clean Air Working Group which opposed the tightening of the Clean Air Act during the 1980s until "several standards were relaxed or delayed and a plan to trade pollution credits in marketlike fashion was accepted by environmentalists". Environmental groups like the EDF and NRDC were already advocating this type of trade.
A number of environmental groups supported the US campaign for emissions trading to deal with global warming. In particular, the EDF, NRDC and World Resources Institute joined with transnational corporations including Shell, Chrysler and DuPont to form the U.S. Climate Action Partnership (USCAP). EDF was the driving force behind this partnership.
"EDF has launched seven municipal carbon trading pilot programs across several cities in China."
Market-based measures such as emissions trading grant the highest decision-making power over environmental quality to those who currently make production decisions now. A market system gives power to those most able to pay. Corporations and firms rather than citizens or environmentalists will have the choice about whether to pollute (and pay the charges or buy credits/rights/allowances to do so) or clean up.
Tradeable pollution rights mean that permission to pollute is granted free or auctioned to the highest bidder. Very polluting or dirty industries can stay in business if they can afford to buy up credits or offsets. In this way, companies can choose whether or not to change production processes, introduce innovations to reduce their emissions or just pay to continue polluting.
Emissions trading is attractive to two groups. One is the financial institutions and energy traders who hope to make profits from the market, either through speculation, hedging or fees. The other are carbon emitting companies that prefer market mechanisms to legislation so they have the choice of reducing their emissions or paying for carbon allowances or to offset their own emissions by paying for carbon reductions elsewhere where they are cheaper.
The EDF's support of emissions trading (or cap-and-trade) is financed by Julian Robertson (pictured), founder of the Tiger Management hedge fund. Robertson has given EDF $60 million to this end. Roberston is on EDF's board of trustees.
Relevant to his cap-and-trade position are his investments in China's leading biofuels maker Gushan and in a company that deals with nuclear waste disposal. Given the right global warming legislation, both of these investments will benefit.
The International Emissions Trading Association (IETA) was established in 1999 to promote a global market in greenhouse gas emission allowances and credits. Its membership consists of 170 'international companies' including energy companies such as BP, Shell and E.ON, banks such as Goldman Sachs and Citigroup, accounting firms such as PriceWaterhouse Coopers, automobile companies such as Chevron and Toyota, carbon trading companies and others.