Cleaner, Cheaper, Smarter:

The Case for Auctioning Pollution Allowances in a Global Warming Cap-and-Trade Program

by Tony Dutzik, Frontier Group; Rob Sargent and Emily Figdor, U.S. PIRG Education Fund

Executive Summary

“Cap and trade” programs are increasingly seen as a leading tool to reduce America’s emissions of global warming pollution. But while cap and trade can be an effective tool to reduce pollution at the lowest possible cost, the devil is in the details. Cleaner, Cheaper, Smarter addresses a critical choice policy-makers must make in designing a cap-and-trade program: the question of whether to give away pollution permits (called “allowances”) to polluters or to sell them in an auction. Auctioning allowances is a fairer, more efficient and more cost-effective solution than giving them away. (Summer 2007)

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