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Cap And Tax - The Waxman-Markey Act Blog

I am starting this blog as a place to put data, my thoughts and others thoughts on cap and tax. the first post is an excellent analysis by lazyJ:


The Waxman-Markey Act does NOT "give away" 85% of emission allowances. It gives away 22%, and reserves the other 78% for the public interest.

Specified trade-sensitive industries (steel, aluminum, cement) get 15%, so they can compete with overseas competitors. They cannot grow, and their allowances decline every year, so they must become more efficient, or shrink.

Merchant power plant owners get about 5%, about half of what they need to operate. Oil refineries get 2%, enough to cover nearly all of their emissions (so they can compete with Caribbean refineries), but not their product (which will be subject to purchasing emission allowances regardless of where the crude is refined).

The rest is reserved for electric consumers, natural gas consumers, heating oil consumers, energy efficiency, low-income assistance, environmental adaptation, tropical forest preservation, and other public interest purposes. Many, or most of these will be auctioned, with the proceeds used for the specified purposes. Only the utilities which actually own their own power plants will directly use the allowances that are targeted for the benefit of their consumers.
Jun 16 10:18 AM