Skip Ribbon Commands
Skip to main content
Home | Support RFF | Join E-mail List | Contact
RFF Logo
Skip navigation links
RESEARCH TOPICS
CENTERS
PUBLICATIONS
NEWS
EVENTS
RESEARCHERS
ABOUT RFF
 

 

 
Join E-mail List
Please provide your e-mail address to receive periodic newsletters and invitations to public events
 
 
Climate Change Legislation: Allowance and Revenue Distribution
Dallas Burtraw
U.S. Senate Committee on Finance | August 4, 2009
RESEARCH TOPICS:
Summary / Publication Commentary
This testimony focuses on the allocation of emissions allowances to consumers through their local distribution companies. This provision and some other features of the proposal are designed to protect consumers from the adverse impacts of price increases and reduceregional inequities. However, this approach also raises the overall cost of achieving emissions reductions. The degree to which it raises the costs will depend on how public utility commissions at the state level incorporate the allowance value into their ratedesign. The outcome at this juncture is uncertain and beyond the reach of legislative language included in H.R. 2454.I consider incremental changes to the allocation formula. A simple per-household rebate of allowance revenue raised by the government through auction, coupled with a more moderate allocation to local distribution companies, can achieve distributional and regional goals at less cost and with greater administrative simplicity and predictability. In this framework, there may still be a role for limited allocation to local distribution companies on behalf of residential-class consumers to correct for regional differences inthe cost burden of the program.However, any implementation of free allocation to local distribution companies needs some amendment to the way it is described in H.R. 2454. In addition, the allocation to local distribution companies should phase out a decade earlier than it does currently.
RFF Home | RFF Press: An Imprint of Routledge Terms of Use | Privacy Policy | Copyright Notice
1616 P St. NW, Washington, DC 20036 · 202.328.5000 Feedback | Contact Us