Could the coal-burning heartland actually fare better under the House climate bill than less carbon-intensive coastal states like California and New York? In some respects, yes, according to a new Reuters report, especially when one takes into account the ways in which the bill distributes carbon allowances to different states:
States heavily dependent on fossil fuels for power generation like Kentucky would get 10.5 carbon credits per capita and Indiana would get eight in electricity consumer assistance programs. ... California would get a little more than two and New York would get nearly three.
The formula used to divide up the carbon credits was supposed to compensate for the degree of ease with which different states could meet the carbon cap. States like California that don't rely heavily on coal will find it easier to meet the cap, and were thus considered less deserving of a handout when Henry Waxman was cutting deals to attract support for the bill. There's a lot of money at stake: Going by the EPA's estimate that carbon allowances will have a value of around $13 per metric ton of carbon in the short term, the value of the giveaways to states would amount to some $350 billion.