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a key part of cap and trade system is how you start the market the initial allocation of permits a popular method for doing so is grant parenting and what happens here is that the government creates these permits and then gives them away for free to the emitters of greenhouse gases and it typically does so proportional to emissions in the recent past and that is why it used to be called grandfathering because government acts as a kindly grandfather gives away prezis uh to the emitters uh and it does so while looking to the past but then people realize that grandmothers are just as bad in this regard the main advantage of grandparenting is that its politically easy it used to be that you did not need a permit to emit your carbon dioxide but now you do so if you introduce those plans theres a lot of lobbying against in order to sweeten the deal the government gives away these permits for free so nothing much changes grandparenting confirms the status quo it does not upset the apple ca
