Cynical Morning: Renewable Portfolio Standard vs Cap and Trade

The discussion lately seems to be whether a Renewable Portfolio Standard or a Cap and Trade system is a more appropriate way to reduce greenhouse gas emissions...the RPS would require utility companies to either own or source a certain percentage of their total electricity sales from renewable sources...cap and trade sets limits on industries by issuing allowances or permits to pollute—in the event that there is either a shortfall or a surplus of emissions in relation to the issued allowances the individual facility would be able to buy or sell allowances depending on need.

Part of the problem is that RPS is said on one side to be flexible and by the other side to be rigid (command and control legislation). The renewable industry is all for it. They benefit by utilities being forced to either purchase renewable energy credits or to invest in renewable energy generation. Either way there is more money going into the industry. But so far the RPS has proven less than perfect—increased investment has been dependent on government subsidies.

Cap and trade gives more flexibility, but doesn't necessarily reduce overall emissions. Emissions caps are usually determined by setting a base year and mandating that total emissions must be below this baseline. But it is believed to work based on the success of the US SOX and NOX markets. 

The real answer is that it doesn't really matter. A portfolio of renewables is necessary for utilities and countries to meet their caps. The only question is who will profit...