Congressional Budget Office:
CBO has published an issue brief and follow-up letter making clear that the effects on low-income households of a “cap-and-trade” system to reduce greenhouse-gas emissions will depend in large part on how the allowances to emit carbon dioxide are allocated.  For instance, CBO notes that, while effective climate-change policies will increase energy prices, “lawmakers could more than offset the price increases experienced by low-income households . . . by selling some or all of the allowances and using the revenue to compensate specific households or entities.”