H.R. 2454, the American Clean Energy and Security Act (ACESA) distributes emission allowances to various purposes.
Based on the legislative language and intent, WRI analyzed where allowance value flows under the ACESA, using the six categories below. This chart shows how allowance values are distributed to these categories on a cumulative basis (see also, distribution on an annual basis).
- Auction with proceeds to the public. For example, low-income consumer assistance.
- Auction with proceeds to agencies for public benefit. For example deficit reduction.
- Free allocation to agencies for public benefit. For example, state programs for energy efficiency.
- Free allocation to regulated entities to benefit energy consumers. For example, allocations to local distribution companies for ratepayer benefit.
- Free allocation to regulated entities for technology deployment. For example, payments for carbon capture and storage of CO2.
- Free allocation to regulated entities with no restrictions. For example, allowances to trade exposed industries.