Jump to ContentJump to Main Navigation

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Friebel, Guido / Mendola, Mariapia / Requate, Till / Tsui, Kevin / Wichardt, Philipp / Zulehner, Christine

4 Issues per year

IMPACT FACTOR 2013: 0.432
5-year IMPACT FACTOR: 0.710

VolumeIssuePage

Climate Policy's Uncertain Outcomes for Households: The Role of Complex Allocation Schemes in Cap-and-Trade

Joshua Blonz1 / Dallas Burtraw2 / Margaret A Walls3

1Resources for the Future,

2Resources for the Future,

3Resources for the Future,

Citation Information: The B.E. Journal of Economic Analysis & Policy. Volume 10, Issue 2, ISSN (Online) 1935-1682, DOI: 10.2202/1935-1682.2533, November 2010

Publication History

Published Online:
2010-11-04

Abstract

The design and implementation of the allocation of CO2 emissions allowances in recent bills in the U.S. Congress introduces a new source of uncertainty to the climate policy debate. We examine the Waxman-Markey bill (H.R. 2454) with scenarios that vary outcomes associated with allocations to electricity local distribution companies, investments in energy efficiency and technology development. The average net household burden in 2016 ranges from $133, with a CO2 allowance price of $13.19, to $418, with an allowance price of $23.41. The uncertainty about average burdens does not carry over to the distribution of those burdens; both scenarios impose the greatest burden as a percentage of income on middle-income households. A third scenario that allocates a substantial portion of allowance value as lump-sum payments imposes an average net household burden of $206, with a price of $17.37 and with highly progressive distributional impacts.

Keywords: cap-and-trade; allocation; distributional effects; cost; burden; regulated entities

Comments (0)

Please log in or register to comment.
Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.