The Distribution of Emissions Permits under a Federal Greenhouse Gas Cap-and-Trade Program
I want to make clear that I do not accept this report's premise that cap-and-trade is the route for the U.S. to take; Wilberforce didn't propose a slave market to end slavery.
As Congress debates the issue of global warming, one key issue involves how emission credits or allowances should be distributed under a cap-and-trade system. Simply giving allowances away to polluting companies as Congress did with the Clean Air Acts acid rain program could amount to a multi-billion dollar windfall for the nations biggest polluters, not to mention a virtual monopoly on the combustion of fossil fuels for incumbent utilities. At stake is billions of dollars the 10 most polluting electric power companies could collectively be awarded $9 billion in allowances annually.
...Rather than giving away these emissions rights, companies should be obligated to purchase allowances.
14 page PDF from Clean Air Watch
This is in direct conflict with the plan the big boys at the US-CAP envision:
A significant portion of allowances should be initially distributed free to capped entities and to economic sectors particularly disadvantaged by the secondary price effects of a cap...(page 8 of their proposal)