From the WSJ Economics Blog:
The Congressional Budget Office, in response to an inquiry from Sen. Jeff Bingaman (D., N.M.) regarding a recent issue brief, said a cap-and-trade program for carbon dioxide emissions could be beneficial to the economy and need not enrich high-income households at the expense of those with low-incomes.
In the letter, the CBO said a cap-and-trade program, which would limit emissions but provide allowances that could then be bought and sold, would produce long-term economic benefits “by avoiding damages in the future” but would impose economic costs in each year in which the limit was in effect. However, “a variety of analyses suggest that a carefully designed program to begin reducing CO2 emissions would produce greater benefits than costs,” the CBO said.
Update: here is a link to the original analysis at the CBO website:
