Full Title: An Analysis of the Carbon Limits and Energy for America’s Renewal (CLEAR) Act and Comparison to Waxman-Markey
Author(s):
Publisher(s): Duke University
Publication Date: April 1, 2010
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Description (excerpt):
The most direct measure of the cost of a cap-and-trade bill is the allowance price. CLEAR allowance prices are estimated at $21 in 2012 and projected to grow 5.5% per year to $55 in 2030. Waxman-Markey allowance prices are $23 in 2012 and projected to grow 5% per year to $55 in 2030.
The ability to bank allowances in CLEAR drives the allowance price all the way up to the legislated price ceiling at the outset of the program. Allowances are banked in the early years while reductions exceed what is required by the cap. In later years, these banked allowances are used, but they are insufficient to meet compliance. After 2023, the price ceiling holds prices below what is needed to meet the cap, so the government then issues extra allowances at the price ceiling and thus makes the cap aspirational rather than binding during this period.