Thursday, November 6, 2008

Obama cap and trade costs


"On the other hand, an auction-based cap-and-trade system would require power generators to buy allowances from the government. This would drive up electricity prices for consumers, especially in coal-fired regions like the Midwest and Southeast."

"Obama campaigned on a platform that championed an exclusively auction-based cap-and-trade system.... This particular campaign promise could seem especially less palatable now. If producers had to pay $25 for every metric ton of carbon they emitted, rates would need to rise anywhere from 23% to 43% at coal-fired utilities in the Midwest and 15% to 29% at coal-fired utilities in the Southeast to offset the costs of emissions allowances, according to a recent analysis by Bernstein Research."

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