Phil Kerpen has a good article over on NRO today looking at the nature of cap-and-trade policies (hint: it’s like a tax hike):

The Washington Post recently called the phrase cap-and-trade “a pithy marketing gimmick,” because it obscures the sprawling regulatory scheme that would be created and the real costs it imposes on energy consumers. Harvard professor Greg Mankiw, former chairman of the Council of Economic Advisors and a supporter of environmental taxes, has explained that cap-and-trade schemes that give away carbon allowances amount to combining a carbon tax with corporate welfare.  

The nonpartisan Congressional Budget Office has determined that the leading cap-and-trade scheme, the Lieberman-Warner Secure Climate Act, would include a huge tax hike, raising federal revenues an astonishing $1.2 trillion over the next ten years. (It’s really only seven years because the bill’s cap doesn’t take effect until 2012.) It also would increase spending by about the same amount, partly in the form of valuable allowances given to the very same companies whose emissions are targeted for reduction. The bill includes no tax cuts.

Many in the energy industry support the bill because the costs, according to the CBO, are passed on almost entirely to energy consumers, while the benefits, in the form of free allowances, accrue largely to energy companies and their shareholders, as well as a wide variety of politically favored special interests.

More here.