In his insightful post, Rob Stavins makes two key points regarding the allocation of emission allowances under climate legislation like that introduced last week by Sens. Kerry and Lieberman.
First, Stavins addresses head-on the concerns that some progressives have toward the allocation provisions in the bill, asking, “Is the Kerry-Lieberman allowance allocation a corporate give-away?” To answer this question, Stavins carries out a careful breakdown of the allowance allocation in the Kerry-Lieberman bill. He shows that the vast majority of emission allowances (more than 80 percent over the duration of the bill) — goes to energy consumers and public purposes (including deficit reduction). That hardly sounds like a windfall to big corporations! Indeed, if you add it up, the largest fraction of allowance value (43 percent in total, according to my calculations) goes to households, through an energy refund to low-income consumers, a tax credit to working families, a universal trust fund for all Americans, and allowances that are allocated to local electricity and gas utilities for the benefit of their customers.
As Stavins’s calcul... Read more