Speaking of auctioning the permits under a cap-and-trade system, yesterday U.S. PIRG released a new report: “Cleaner, Cheaper, Smarter: The Case For Auctioning Pollution Allowances In A Global Warming Cap-and-Trade Program.” It argues for auctioning 100% of permits:
Auctioning all allowances under a cap-and-trade program is fair, reduces the societal cost of achieving emission reductions compared to giving allowances to polluters for free, and promotes a transition to a clean energy economy. For those reasons, allowances should be auctioned in any global warming cap-and-trade program.
Here’s a statement of support for that position, signed by a gazillion green and progressive leaders.
The report recommends:
• Auction 100 percent of emission allowances.
• Use the revenues from auctions to:
- Support clean energy technological development, including research and development funding and early market support for clean technologies.
- Invest in energy efficiency improvements to reduce the cost of the program to consumers.
- Provide direct consumer rebates to alleviate any increases in energy costs that result from the program.
• Adopt complementary policies that further reduce emissions, reduce the cost of the program, and help achieve the goal of transitioning America to a clean energy economy. Among those policies are stronger energy efficiency standards for vehicles and equipment, enhanced building energy codes, renewable energy standards for electricity generation, global warming performance standards for electricity generation and transportation fuels, and incentives for deployment of promising new technologies, such as solar power and extremely efficient “zero-energy” homes.
Policy-makers at all levels must immediately make clear that new coal-fired power plants will not be grandfathered under any allowance allocation scheme.
For more, see Hill Heat.