Cleaner, Cheaper, Smarter

The Case for Auctioning Pollution Allowances in a Global Warming Cap-and-Trade Program

“Cap and trade” programs are increasingly seen as a leading tool to reduce America’s emissions of global warming pollution. But while cap and trade can be an effective tool to reduce pollution at the lowest possible cost, the devil is in the details. Cleaner, Cheaper, Smarter addresses a critical choice policy-makers must make in designing a cap-and-trade program: the question of whether to give away pollution permits (called “allowances”) to polluters or to sell them in an auction. Auctioning allowances is a fairer, more efficient and more cost-effective solution than giving them away.

Report

“Cap and trade” programs are increasingly seen as a leading tool to reduce America’s emissions of global warming pollution. But while cap and trade can be an effective tool to reduce pollution at the lowest possible cost, the devil is in the details. Cleaner, Cheaper, Smarter addresses a critical choice policy-makers must make in designing a cap-and-trade program: the question of whether to give away pollution permits (called “allowances”) to polluters or to sell them in an auction. Auctioning allowances is a fairer, more efficient and more cost-effective solution than giving them away.e

Authors

Tony Dutzik

Associate Director and Senior Policy Analyst, Frontier Group

Tony Dutzik is associate director and senior policy analyst with Frontier Group. His research and ideas on climate, energy and transportation policy have helped shape public policy debates across the U.S., and have earned coverage in media outlets from the New York Times to National Public Radio. A former journalist, Tony lives and works in Boston.

Rob Sargent