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June 15, 2009
Congress is currently considering the creation of a national cap and trade program to reduce greenhouse gas emissions in the United States. The American Clean Energy and Security Act (H.R. 2454), recently reported out of the House Energy and Commerce Committee, includes a cap and trade program where 15 percent of emissions allowances would be auctioned each year for the protection of low-income households. Most of the remaining allowances would be allocated (provided at no cost) in the first few years to a variety of entities, including the electricity sector, energy-intensive/trade-exposed industries, natural gas distribution companies, states (for investments in renewable energy and energy efficiency), groups that work to prevent tropical deforestation and to meet other stipulated public purposes, etc.
On June 15, the Environmental and Energy Study Institute (EESI) and Heinrich Boell Foundation held a briefing for Congressional staff on cap and trade programs and the auction of emissions allowances and revenue spending. This briefing examined the experience of the EU and the northeastern states participating in the Regional Greenhouse Gas Initiative (RGGI), both of which have already implemented cap and trade programs to reduce greenhouse gas emissions. Speakers discussed the distributional and efficiency consequences for taxpayers of auction and allocating emissions permits for various purposes. The Heinrich Boell Foundation also released a new report Cap and Invest: Why Auctioning Gains Prominence in the EU Emissions Trading Scheme at the briefing.