Beware of greens bearing free carbon allowances
Climate bill supporters are trying to attract Senate votes for Waxman-Markey by touting the free carbon allowances that would be allocated to individual states. This analysis by the World Resources Institute, estimates the range of free carbon allowances for energy consumer assistance programs on a per capita basis at $40/person (California) to $160/person (Wyoming) for the year 2016. The average assistance level is $90/person.
While such “free money” sounds great, it does have a hidden cost — higher energy prices that far exceed the value of the allowances.
For example, Georgia residents would receive about $80/person/year in free allowances to offset higher energy costs. But the head of the Georgia Public Service Commission recently stated that a climate bill would raise energy costs to the average Georgia Power customers by an estimated $66/month by 2020. So while a family of four might get free allowances worth $320/year, their cost of electricity would increase by $792/year, a net loss of $472/year.
Would you pay that much money annually for a government program that accomplishes nothing?
