• Matthew Yglesias cites a new CBO study (with a great chart) showing the relative effects of carbon credit auctions versus carbon credit giveaways on household income. Simply, auctioning carbon credits to industry and using that money to issue rebates to energy users results in gains for the lowest quintiles and modest losses for the higher ones, and giving away credits to industry results in large losses for everyone but the very highest quintile, who see a large gain.
Naturally “moderate” Democrats such as Jeff Bingaman prefer the cap-and-giveaway out of what they deem pragmatism, but what looks a lot like fanatical devotion to the interests of the well-off to the exclusion of other concerns. [...] So if a cap-and-trade bill does pass, I assume it’ll take a cap-and-giveaway form, and you can bet that opponents of auctions will specifically cite the interests of the economically struggling as their main motive for screwing the economically struggling over.
• Both Ben Nelson and Mike Johanns are on the list of the 28 senators who oppose using the budget process to implement cap-and-trade. Nelson previously stated he questioned “…counting revenue for cap and trade policies that haven’t been implemented and could have a negative impact on our economy.” The CBO study estimated both cap-and-auction and cap-and-giveaway would have an almost identical -0.5 percent effect on GDP.