How the eff does it work? Who gets the credits to start with? Why do you think the companies prefer cap-and-trade? of course it's more complicated to end up monitoring both the pollution and who owns what credits.

the whole point of cap-and-trade is to avoid the word 'tax', and to create a vast rent-seeking system and potential for gaming the system, and make it politically palatable by paying off the people who might object.

http://www.telegraph.co.uk/finance/newsbysector/energy/69126...

http://www.france24.com/en/20160503-france-trial-multi-billi...

The ethanol credits are linked to ethanol production.

my comment referred to a choice between carbon tax vs. cap-and-trade for reducing emissions, which seems unrelated to ethanol credits.

I just think taxing coal/oil/natural gas as it's produced and sold, based on how much carbon it contains, is easy and effective, enforcing a carbon credit system is hard and prone to shenanigans, fraud, corruption.

Economically they're essentially the same and the shenanigans are a massive bug. But politically, shenanigans are a feature.