Understanding Allowance Allocation Options Under the Clean Power Plan

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In August 2015, the U.S. Environmental Protection Agency (EPA) released its final Clean Power Plan to regulate carbon dioxide (CO2) emissions from existing power plants. States are now working to decide how best to comply, including whether to opt for a rate-based or mass-based compliance plan. For states that choose to comply using mass-based trading, the decision of how to allocate emission allowances is a key political choice. While the allocation approach that a state selects will not affect the environmental outcome of the policy, it can have a significant impact on who bears the cost of the program.

Join BPC for an event that will introduce some of the key issues related to allocation. Through moderated discussion, panelists will explore options for distributing allowances, lessons learned from past policy experience, the implications of electricity market structure, and the expected impacts on companies and customers. Panelists will weigh the benefits of a simple allocation approach versus a more complex design, including how allocation might attempt to address leakage of emissions to non-covered sources and the potential for disproportionate impacts on communities, companies, and/or industries.


Bipartisan Policy Center
1225 Eye Street NW Suite 1000
Washington DC 20005

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