CBO on cap-and-trade

CBO director Douglas Elmendorf hits all the right notes on cap-and-trade, especially this one:

Alternatively, allowances could be given away for free to certain industries. Giving away allowances is generally equivalent to auctioning the allowances and giving the proceeds to the same firms.

PS. CBO also has a paper on climate change impacts on the U.S. And this excerpt from Elmendorf's bio is worth a chuckle:

Among Doug Elmendorf’s publications are these: "Can Financial Innovation Help to Explain the Reduced Volatility of Economic Activity?" in the Journal of Monetary Economics (January 2006), with Karen Dynan and Daniel Sichel.