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Carbon Cap and Trade in Today's Economy

By: Linda Nguy

Charged with completing a report to the Legislature, the Center recently released a report “Governance Options for Carbon Cap and Trade Revenue” that examines governance options for determining how to expend potential revenue from the sale of emission credits under a carbon cap and trade program.

Bleak budget projections place statewide and regional cap and trade initiatives on the backburner. However, the national front shows greater promise for carbon reduction as seen in the inclusion of a cap-and-trade proposal in Obama’s $3.5 trillion budget plan presented to Congress in February, which is now the subject to intense political
wrangling.

If a state, regional or federal cap and trade proposal passes, billions of dollars in revenue will be potentially generated raising questions of equity, efficiency, and effectiveness. This report seeks to inform policymakers on different governance options and the tradeoffs to consider when emphasizing certain criteria over others. A hearing to the Legislature will likely take place in late April…stay tuned for more information.

Hubert H. Humphrey Institute of Public Affairs
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