Introducing climate change policies such as carbon pricing can bring substantial costs for fossil-fuel-fired electricity generators, with incumbents often granted a transitional allocation of free emission permits. The free allocation of emission permits and the pass-through of carbon prices to higher electricity prices has created substantial concern that these policies allow emissions-intensive firms to reap windfall profits. We use the implementation and later repeal of Australia’s price on carbon to show that coal-fired plants which received free permits had a substantial increase in their profits. This result supports calls for any transitional climate policy assistance to be tied to projected pass-through rates in order to avoid creating wealth transfers from taxpayers to emission-intensive generator owners.

引入碳定价等气候变化政策可能会给化石燃料发电企业带来巨大成本，现有企业通常会获得免费排放许可的过渡性分配。排放许可的免费分配和碳价格对更高电价的转嫁引起了人们的极大关注，即这些政策允许排放密集型企业获得暴利。我们使用澳大利亚碳价格的实施和后来的废除来表明获得免费许可证的燃煤电厂的利润大幅增加。这一结果支持将任何过渡性气候政策援助与预计转嫁率挂钩的呼吁，以避免造成财富从纳税人转移到排放密集型发电机所有者。