Climate change legislation restricting greenhouse gas (GHG) emissions is necessary to avoid the costly and potentially catastrophic environmental and economic consequences likely to result from an unabated buildup of heat-trapping gases in the atmosphere. However, such legislation also imposes compliance costs on electricity generators and other emissions sources. These costs will largely be passed on to consumers. Low-income households will feel the resulting squeeze on their budgets most acutely. On top of the challenges they face making ends meet, low-income households typically spend a larger share of their budgets than do affluent consumers on the energy and energy-intensive goods and services that will be most affected. Poorly designed climate legislation could push more families into poverty and make many of those who are already poor still poorer. Fortunately, it is possible to design policies that mitigate the impact of climate legislation on vulnerable households without compromising the energy and environmental goals of that legislation.