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CA Emissions Credits Should be Sold, Not Given Away, Says Advisory Committee A group charged with proposing a method for California to allocate greenhouse-gas emissions allowances recently suggested that most but not all the available allowances should be sold.
The Economic and Allocation Advisory Committee, comprising government officials, academics and business representatives, reported that the state could raise between $5 and $50 billion over eight years by auctioning allowances.
The proceeds could be used in part to bolster the state’s General Fund.
According to Dow-Jones, Schwarzenegger praised the plan in a statement for “[returning] value to the people,” since a more robust General Fund means less need for tax increases—or even possible tax cuts—in the future.
The group’s chairman, Stanford professor of economics Larry Goulder, said that returning that value was a top priority. The report concluded that a cap-and-trade program would increase retail prices for power and other items, because businesses would pass compliance costs on to consumers.
The committee also recommended a fund to help assist small businesses and other needy companies with the costs of compliance. Last year California’s Air Resources Board issued draft cap-and-trade rules, but without a plan for the allocation of allowances or an evaluation of the climate rules’ potential economic impacts. The advisory committee is assisting ARB with its economic impact analysis. |
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