Topic: global warming facts - An account of a House hearing on auctioning permits under cap-and … - Grist Magazine

At this morning's House Global Warming Committee hearing on Auctions and Revenue Recycling in Cap and Trade , the witnesses presented some of the first Congressional testimony on the economic implications of a greenhouse-emissions cap and trade system such as the one proposed in Lieberman-Warner (S. As power generators determine the price at which it becomes economic for their plants to produce power, they have to decide whether to expend allowances in order to generate electricity, save those allowances for a time when electricity prices are higher, or sell allowances to other power producers who need to meet their compliance obligations. In order to underpin the energy and climate package of 23 January 2008 the Commission undertook a comprehensive (regulatory) impact assessment including an economic analysis of the effects of auctioning compared to free allocation of allowances. Essentially, the free allocation to electricity customers is a subsidy to electricity consumption that is not received by users of natural gas or transportation fuels or by industry or commerce, except to the degree that they consume electricity. If the free allocation to achieve compensation is implemented at the federal level, we find the incremental cost of compensating for the last increment of harm in the electricity sector would cost ten times that amount in allowance value. read more

Tags: allowances, electricity, allocation, cap, global warming facts, free,