Allocation based on historical generation is likely to result in a "tragedy of the commons," because the cost of measures (such as developing a wind farm) are borne by the investing utility, but the emissions reduction benefits accrue to all that use the grid (including other utilities and power generators).
The Supreme Court has put a temporary hold on enforcement of the Clean Power Plan while lawyers battle over its ultimate fate, but here at AEE we’re confident the rule will prevail — and we’re keeping busy in the meantime, working with the long list of states committed to planning for compliance. We’ve got plenty of advice for states, and today we’re focusing on those that would choose to comply using mass-based plans. Bottom line: How you distribute the emission allowances needed for compliance makes a difference.