In a World of Ride-or-Die Polluters... Can Carbon Permits Be a Solution?

Imagine a world where every factory receives a certain number of amusement park tickets. Like five-year-olds at Disneyland, they all want infinite rides—but there are only so many rides and tickets to go around. Do they rush from ride to ride, or take a break for corndogs instead?

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Tickets & Invisible Tails

These are essentially choices factories and other polluting firms are forced to make. But instead of amusement ride maniacs, they're hooked on polluting. Pollution—whether as carbon dioxide or methane emissions, water or soil contamination—is an invisible tail following each item, each service produced by a majority of firms worldwide. Think of it as Peter Pan's shadow. If governments rush to eradicate pollution, firms are paralyzed . . . but if it's left ignored, it's the earth that pays.

Policymakers have created a mini market for pollution. Each firm gets a certain number of tickets— a "quota" for pollution that allows them to emit a certain amount of toxins. This is predominantly seen in carbon dioxide permits, but some governments have also enacted methane permits (EPA).

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If firms don't reach their given pollution limits, they can sell permits to others seeking to pollute more. In the real world, firms like Shell, Microsoft, and Volkswagen are dominant carbon permit purchasers. In 2024, Shell retained 14.5 million carbon permits, protecting its top spot two years in a row. This is equivalent to 14.5 million metric tonnes of carbon dioxide.

For some firms, selling excess permits can sometimes earn more than using permits to produce and pollute themselves. It's weighing corndogs and rides. Which do you benefit most from? Tradeable carbon-permits lets firms choose.

How the Park Opened: The Story of Cap-and-Trade

Policymakers continue to design mechanisms to make sustainability compatible with profits. They toggle with taxes, package "gifts," or sums of money called subsidies to promote sustainable technology, and pull all sorts of stunts to make capitalism greener.

Carbon permits are often effective because the number of tickets never increases. A firm wanting to pollute more can only buy from another firm that wants to pollute less. Just as an amusement park only has a finite number of rides, the market is set at a definite amount of GHG emissions. And it does not budge, leaving the market to figure it out on its own.

The idea of trading pollution started decades ago. In 1968, economist John Dales proposed selling the right to pollute. By 1990, EPA policymaker Brian McLean implemented it under the Clean Air Act. Even regulators admitted it reduced their own power—but it worked, and emissions dropped (Conniff).

Will the Cap Hold?

Now, numerous nations, including China, South Korea, the UK, Canada, and the EU, engage in tradable carbon permits. Scarce tickets hike up consumer prices. For you, this means products and services like flights, electricity, or even fast fashion become more expensive (Kinney).

Even if you never touch a ticket, the market touches your wallet. The park is already open. The tickets are already being traded. Now, the real question is whether the cap will hold—or whether the mess keeps growing while someone else pays for it. That someone could be you.

Works Cited

Conniff, Richard. “The Political History of Cap and Trade.” Smithsonian Magazine, 13 Aug. 2009, www.smithsonianmag.com/science-nature/the-political-history-of-cap-and-trade-34711212/. Accessed 24 Dec. 2025.

EPA. “EPA Finalizes Rule to Reduce Wasteful Methane Emissions and Drive Innovation in the Oil and Gas Sector | US EPA.” US EPA, 12 Nov. 2024, www.epa.gov/newsreleases/epa-finalizes-rule-reduce-wasteful-methane-emissions-and-drive-innovation-oil-and-gas.

Kinney, Patrick L. “From Air Pollution to the Climate Crisis: Leaving the Comfort Zone.” Daedalus, vol. 149, no. 4, American Academy of Arts and Sciences, Sept. 2020, pp. 108–17, https://doi.org/10.1162/daed_a_01820. Accessed 24 Dec. 2025.

“Shell and Microsoft Lead the Carbon Credit Market in 2024.” Green.earth, DGB Group, 23 Jan. 2025, www.green.earth/news/shell-and-microsoft-lead-the-carbon-credit-market-in-2024.