suffices to prevent profit losses among the eight industries that, without free allowances or other compensation, would suffer … the largest percentage losses of profit. Under a wide range of cap-and-trade designs, freely allocating less than 15 … percent of the total allowances prevents profit losses to these most vulnerable industries. Allocating 100 percent of the …

potential loss of profit. By enabling firms to retain only a very small fraction of these potential revenues, the government can …

close attention to profit impacts …These results indicate that profit preservation is consistent with substantial use of auctioning and the generation of … than 15 percent of the emissions allowances generally suffices to prevent profit losses among the eight industries that …

close attention to profit impacts.We find that the effects on profits depend critically on the method of allowance … allocation. Freely allocating fewer than 15 percent of the emissions allowances generally suffices to prevent profit losses among … profit. Freely allocating 100 percent of the allowances substantially overcompensates these industries, in many cases causing …