From E&E News
(subscription required), at an event in Washington hosted by the Council
on Foreign Relations, Rep. Rick Boucher (Va.), chair of the Energy and
Air Quality Subcommittee of John Dingell’s Energy and Commerce
Committee,
said he planned to draft a cap-and-trade bill that distributes tens of
billions in pollution credits to U.S. industries for free:
I’m disinclined at the moment to do auctioning, at least in the early
years to give it very much prominence, if any at all. The best we can
do is give the allowances to the emitters according to their needs.
We’re going to have enough problems as it is with coal-fired
utilities, for example, and other carbon-intensive industries meeting
our production schedules. I think perhaps, at least for the early
years, it’s better not to compound these problems by imposing a cost
on these emitters of having to go out and pay for these allowances. It
will be the least painful, most politically attractive way to do it.
In other comments, Boucher asked Pelosi to delay the conference
committee negotiations on the energy bill until he produced his draft
cap-and-trade bill, but he said she probably won’t. He agrees with the
80% by 2050 target but is unsure of the path to there: “The schedule
that takes us to that very aggressive target will be perhaps the most
difficult thing we have to negotiate.” He will be releasing a series of
position papers over the coming weeks.
In contrast, Nat Keohane, Ph.D., the Director of Economic Policy and
Analysis at Environmental Defense offers support for full auctions in a
blog
post
countering Greg Mankiw’s recent NYT
op-ed
favoring a carbon tax over a cap-and-trade system (in line with Robert
Shapiro’s argument):
Mankiw assumes that allowances in a cap-and-trade system would be
handed out for free rather than auctioned, thus generating no federal
revenue. Now, I admit that this has been the modus operandi in the
past. Virtually all allowances were handed out for free under the
wildly successful sulfur dioxide trading program in the U.S., set up
by the 1990 Clean Air Act Amendments. But that doesn’t mean it has to
be that way.
The alternative, full auctioning, would raise exactly the same amount
of money as a carbon tax, and there are signs that it’s gaining
ground. Earlier this year, several states participating in the
Regional Greenhouse Gas Initiative, including New York and New Jersey,
announced plans to auction off 100 percent of their allowances. Plus
there are calls to phase in auctioning in the European Union’s
Emissions Trading System.