CleanTechnica is the #1 cleantech-focused
website
 in the world. Subscribe today!


Cap And Trade kentucky

Published on September 11th, 2009 | by Susan Kraemer

9

76% of Cap and Trade Bill Allowances Benefit People, Not Polluters

Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

September 11th, 2009 by  

Since the Waxman-Markey Cap and Trade bill is designed to reduce pollution by paying people who reduce pollution with money from polluters, it comes in for all the usual criticism from the fossil industries. They claim Al Gore something something, there’s no global warming, scientists didn’t consult me, it was cold yesterday and so on.

However, it also comes in for some anger from the rest of us, who do support the idea of funding a transfer to a renewable energy economy, but worry that we will pay higher costs and believe that the Cap and Trade bill gives too many initial free allowances to polluting industries. But this anger may be unwarranted.

Consumers are shielded from rising energy costs with most of the allowances:

Initially 76% and then 83% of allowances benefit people not polluters

The amount of allowance value directed to consumers or for other public benefit (more renewable energy, efficiency, low-carbon transportation technologies, green-collar job training, and the transition to a low-carbon economy) totals 76 percent of the cumulative allowance pool from 2012 through 2025 and 83 percent from 2012 through 2050. (WRI)

For the poor, subsidies would completely offset any rising cost of fossil energy.

This primarily affects the South, where more people depend on coal-powered electricity, are poorer, and live in rural areas. Congress plans to vary the size of the rebate to reflect other factors such as region of the country or vehicle ownership, providing larger rebates to families living in very cold or very hot climates or in rural counties where people have to drive longer distances.

Because many of the poorest Americans – those who are disabled and the elderly – have no jobs, the allowances for reducing the impact of higher energy costs initially would be in the form of a higher Cost of Living Adjustment to SSI, and for those on food stamps would be transferred electronically to an EBT account without any increase in administrative costs. For the working poor, an expansion in the Earned Income Tax Credit would be used to help offset higher energy costs with virtually no increase in administrative costs or bureaucracy. For the rest of us, it would come as tax rebates and subsidies.

Three accounts would be set up to fund these allowances.

(1) The Strategic Reserve Fund.

(2) The Climate Change Consumer Refund Account.

(3) The Climate Change Worker Adjustment Assistance Fund.

These would use the deposits of funds to pay out subsidies and rebates. The beneficiaries would be not fossil industries but downstream businesses and energy consumers.

Utilities are prevented from passing along costs to customers.

Utilities would be more highly regulated under the bill than now. Business as usual would end. Like utilities in the Renewable Portfolio Standards states do now, they would have to buy more renewable energy like solar and wind. They would not be able to keep on using fossil fuels as they get more expensive, and merely raise prices for their customers. There is a fixed credit or rebate on electricity bills to counteract any rising costs of fossil fuels due to Cap and Trade, funded by the The Climate Change Consumer Refund Account. This would be audited with the results available on the internet.

States would have to use 50% of their emission allowances to provide direct financial assistance to consumers with energy rebates and cost-effective energy efficiency programs to reduce their overall fossil fuel costs.

As our investments as a nation in renewable energy pays off we would all get rebates

Renewable energy is much cheaper than fossil energy once the initial capital investment is paid off, as there are no ongoing fuel costs. Once deposits are made to the Climate Change Consumer Refund Account, the Secretary of the Treasury would provide tax refunds on a per capita basis to each household in the United States, divvying up the the total deposited into the Climate Change Consumer Refund Account.

Only 8% of the free allocations go to polluters

The regulated entities, which are coal fields and point of entry oil and gas pipelines would initially get 8% of the free allocations. The amount increases increases to 23 percent in 2014 then declines again, reaching zero by 2025.

Related stories:

Waxman-Markey Pays for Itself, Congressional Budget Office Finds

Why Some States Have More Renewable Energy

HR 2454

783 USE OF ALLOWANCES

789 CLIMATE CHANGE CONSUMER REFUNDS

793 ESTABLISHMENT OF FUNDS

Image from Flikr user lawr8223

Keep up to date with all the hottest cleantech news by subscribing to our (free) cleantech newsletter, or keep an eye on sector-specific news by getting our (also free) solar energy newsletter, electric vehicle newsletter, or wind energy newsletter.



Share on Google+Share on RedditShare on StumbleUponTweet about this on TwitterShare on LinkedInShare on FacebookPin on PinterestDigg thisShare on TumblrBuffer this pageEmail this to someone

Tags: , , , ,


About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • I’M Just Stupid

    Renewable energy has no cost after the initial capitolization? What are you guys smokin or are you just stupid like me!!!

    [Ed: here's an example of how renewable energy costs less because there is no ongoing fuel needed - the Island of Alameda next to Oakland signed up for geothermal energy about 20 years ago, now their electricity costs are only about one third that of their neighbors in Oakland.

    See (pg 7 I think) of this post:

    http://cleantechnica.com/2009/08/17/which-states-are-greenest-and-how-they-made-it-happen/

    A town in Iceland has no energy costs now after 30 years ago they built a geothermal plant. Both these examples are geo, but generally fuel less energy like solar and wind will always cost less once they are paid off. Any new plant costs money to build. Maint is a minimal cost.]

  • I’M Just Stupid

    Renewable energy has no cost after the initial capitolization? What are you guys smokin or are you just stupid like me!!!

    [Ed: here's an example of how renewable energy costs less because there is no ongoing fuel needed - the Island of Alameda next to Oakland signed up for geothermal energy about 20 years ago, now their electricity costs are only about one third that of their neighbors in Oakland.

    See (pg 7 I think) of this post:

    http://cleantechnica.com/2009/08/17/which-states-are-greenest-and-how-they-made-it-happen/

    A town in Iceland has no energy costs now after 30 years ago they built a geothermal plant. Both these examples are geo, but generally fuel less energy like solar and wind will always cost less once they are paid off. Any new plant costs money to build. Maint is a minimal cost.]

  • Pingback: Cap and Trade 101: Why “Free” Allowances Are OK : CleanTechnica

  • Pingback: Cap and Trade 101: How a “Cap” Ensures Carbon Reductions : CleanTechnica

  • Pingback: US Farm Recycles Wind Turbines From Denmark and Germany : CleanTechnica

  • Susan Kraemer

    Cap and Trade currently begins 2012 (that’s if they can pass it this year!)

  • Susan Kraemer

    Cap and Trade currently begins 2012 (that’s if they can pass it this year!)

  • Jeanne Roberts

    If cap-and-trade costs to the retired will be offset by a higher Cost of Living Adjustment to SSI, why is the SS administration telling us there will be no cost of living adjustments until 2012?

  • Jeanne Roberts

    If cap-and-trade costs to the retired will be offset by a higher Cost of Living Adjustment to SSI, why is the SS administration telling us there will be no cost of living adjustments until 2012?

Back to Top ↑