Auction would avert U.S. windfall CO2 profits: report

http://www.reuters.com/article/environmentNews/idUSN2530479420070625

NEW YORK (Reuters) - Power generators could reap windfall profits in future U.S. greenhouse gas markets unless credits to emit the gases are auctioned, a study released on Monday said.

The U.S. Congress is mulling several bills that would aim to tackle global warming in the world's biggest greenhouse gas polluter by creating a cap-and-trade market on the emissions. Such markets aim to cut emissions by forcing companies to cut them under a set baseline that gradually gets tougher, or buy credits for the right to pollute.

At issue is the initial distribution of those credits.

In the European Union market that launched in 2005, the credits were given away to industry, leading to criticism that some of the polluters got more than they needed and sold them at a profit without reducing emissions.

"The European experience ought to be enough to make the U.S. Congress take a huge deep breath before trying to emulate it," Frank O'Donnell, president of green group Clean Air Watch, said in an interview. His group issued the report, called "Should Big Polluters Own the Sky?"

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