Common Tragedies

Thoughts on Environmental Economics

Congressional 411

Posted by Daniel Hall on October 31, 2007

Talking about the current climate policy proposals in Congress, John Whitehead of Environmental Economics wonders:

…what is the difference between Bingaman-Specter’s “hand out about 80 percent of emissions credits to industry instead of making companies pay for them” and Lieberman-Warner’s “about 20 percent of emissions credits to be auctioned initially”?

Now he can find out for himself! Resources for the Future has a useful table and chart up at their website summarizing the major market-based climate change bills that have been proposed in Congress.

And regarding John’s question, it turns out that there is some difference between allowance allocation in the bills, but the source he’s quoting doesn’t really get it quite right. Both bills would initially auction 24% of allowances — with this percentage increasing over time — and give free allowances to industry that would be gradually phased out, 53% in the case of Bingaman-Specter, and 40% in the case of Lieberman-Warner.

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