The headlines read something like this: Obama Backs Off 100 Percent Auctioning. One element of the story is sure to follow: Environmentalists aren’t going to be happy! The question of 100 percent auctioning at the beginning of a national cap and trade system is one thing. But what I can’t abide is the pervasive notion that “environmentalists” are the only ones who should care. The fact is, the decision to auction permits or give them away for free affectsevery single citizen in the country.
The White House science adviser should know better. Here he is paraphrased in the Washington Post (emphasis mine):
The Obama administration might agree to postpone auctioning off 100 percent of emissions allowances under a cap-and-trade system to limit greenhouse gas pollution, White House science adviser John P. Holdren said today, a move that would please electricity providers and manufacturers but couldanger environmentalists.
Ah, yes, the “angry environmentalist.” It’s such a tired, old stereotype—but apparently an easy one even for the Post to blithely reinforce. But, leaving aside all the baggage that comes with the very term “environmentalist,” the thing is that in strictly environmental terms, the cap works the same way whether or not permits are free or auctioned. If environmentalists are angry, it’s for the same reason everyone should be: free permits are an unnecessary giveaway to big business, at the expense of ordinary families.
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With an auction system, communities can gain a source of revenue to invest in clean energy, help consumers deal with rising energy costs, boost efficiency in homes and buildings, ease transitions for affected workers, and fund training in green-collar jobs. On the other hand, if permits are given out for free companies will raise prices and simply pocket the extra money at the expense of individual consumers.
Making this a decision in which only greens and business interests have a stake vastly diminishes the true breadth of the issue. After all, it’s not just environmentalists who dream of a better future for their kids. It’s not just environmentalists who want jobs in their communities. It’s not just environmentalists who want to unhitch our economy from the burdens (and geopolitical dangers) of fossil fuel dependence. And it’s certainly not just tree-huggers and greens who’d rather invest in our families and our communities than write giant personal checks to Big Oil.
In cap and trade, auctioning is a pocketbook issue, not a green one. Done right, auctioning can protect everyone’s financial interests; while grandfathering (free permits) is typically a recipe for massive corporate giveaways—something that everyone, not just “environmentalists,” should be opposed to.