Policies that restrict greenhouse gas emissions, such as cap-and-trade
programs, are often proposed to encourage energy efficiency and greater
use of clean energy sources. To offset the impact of higher
energy-related prices, on low and moderate income households,
associated with restrictions on greenhouse gas emissions, the Center on Budget and Policy Priorities (CBPP) has designed a
“climate rebate” plan. According
to the CBPP, rebates are an effective way to assist households because
they allow consumers to maintain their purchasing power amidst rises
in energy costs while preserving the incentive to conserve energy and
invest in energy-efficiency that is created by higher prices.