| In a recent report, Charles Frank of the Brookings Institute discussed the pro and cons of a US carbon tax versus cap-and-trade. Frank claimed in the report that a carbon tax is clearly easier to administer because with cap-and-trade there is an additional administrative requirement – the allocation of allowances.
Early attempts at allocation allowances – for example, the sulfur dioxide trading system used in the US in the 1990s – allocated allowances on the basis of historical emissions by source. Frank explained that the more modern approach is to auction allowances as fine by the nine eastern US states comprising the Regional Greenhouse Gas Initiative (RGGI). Auctions are easier to administer and more politically palatable, he claimed...............................................Full Article: Source |