Reference no: EM13541157

There is considerable uncertainty about how much it will cost to reduce mercury emissions from coal-fired power plants. The Democratic administration in the United States is proposing taxing mercury emissions. A group of deregulated electricity generators are opposed to the tax and have started a public relations campaign against the "tax-happy" Democrats. An environmentally focused women's group "women hate atmospheric mercury!" or WHAM! is supporting the electricity generators' campaign. (Above a certain threshold, mercury exposure in very young children can have severe neurological consequences, and some suspect that mercury exposure is linked to autism.) The WHAM! electricity generator campaign is calling for a cap on mercury
emissions instead of a tax and are strongly advocating that the permits be allocated based on historical mercury emission rates.

(a) Why would WHAM! join generators to support the cap-and-trade system over the tax on mercury emissions?

(b) The Ohio branch of WHAM!, (WHAM-OH) is located near the Ohio River Valley, where there are deregulated, very old coal power plants that emit a lot of mercury, has stayed out of the campaign against the tax, and are even making noises about launching a counter-campaign to fight the proposed cap-and-trade system. Why might this be?