Harvard University - Belfer Center for Science and International Affairs - An Economic View of the Environment » Blog Archive » The Wonderful Politics of Cap-and-Trade: A Closer Look at

Thoma: ...the recent discussion between Brad DeLong and Greg Mankiw on the effects of giving away rather than auctioning carbon permits under a cap and trade system (see, e.g., here, here, here, and here). Mankiw begins with the premise that:

Rather than auctioning the carbon allowances, the bill that recently passed the House would give most of them away to powerful special interests.

But is it correct to classify the program as "giving most of them away to powerful special interests"? Here's Harvard's Robert Stavins who knows a thing or two about this topic. He notes that "it is remarkable (and unfortunate) how misleading so much of the coverage has been of the issues and the numbers surrounding the proposed allowance allocation." He also says that "we should be honest that the legislation, for all its flaws, is by no means the 'massive corporate give-away' that it has been labeled. On the contrary, 80% of the value of allowances accrue to consumers and public purposes":

Harvard University - Belfer Center for Science and International Affairs - An Economic View of the Environment » Blog Archive » The Wonderful Politics of Cap-and-Trade: A Closer Look at: "The headline of this post is not meant to be ironic. Despite all the hand-wringing in the press and the blogosphere about a political “give-away” of allowances for the cap-and-trade system in the Waxman-Markey bill voted out of committee last week, the politics of cap-and-trade systems are truly quite wonderful, which is why these systems have been used, and used successfully."