Obama's budget uses cap-and-trade to limit emissions, raise funds
President Obama's budget plan, submitted to Congress this week, includes provisions for a cap-and-trade program to limit greenhouse gas emissions, with the proceeds from cap-and-trade auctions being used to fund renewable energy projects and other programs. The President's proposal estimates that more than $80 billion will be generated each year by the auctioning of carbon pollution permits through the cap-and-trade program.
The Obama budget promises what it calls a comprehensive effort to address global warming, slash oil imports and create a new “green” economy that produces millions of new jobs.
The White House estimates that the plan, built around a cap-and-trade program to limit greenhouse gas emissions, will produce $150 billion over 10 years beginning in 2012 to finance renewable energy projects and another $65 billion a year to pay for middle-class tax credits. Any further revenue from the sale of emissions permits will be returned to families, communities and businesses that suffer hardship as the result of higher energy prices, the budget blueprint states.
Under the plan, 100 percent of pollution permits will be auctioned, meaning no sector of the economy will be exempted from paying for the right to emit carbon dioxide and other gases that contribute to global warming. This is consistent with Mr. Obama’s campaign pledge, and it is a matter of fierce debate.
The budget establishes relatively aggressive emissions reductions targets of 14 percent from 2005 levels by 2020 and 83 percent by 2050.
The budget projects a large increase in spending at the Department of Energy in the current fiscal year, to $33.9 billion from $24.1 billion last year, because it includes some money from the $787 billion stimulus package just approved for research, weatherization programs and modernization of the electric grid. Energy Department spending drops to $26.3 billion for the fiscal year 2010, beginning in October, although the stimulus package provides an additional $38.7 billion for energy programs that will be spent over the next several years.
The Department of Interior budget grows slowly, with new money for park maintenance, endangered species protection and renewable energy projects.
At the Environmental Protection Agency, the budget projects a 34 percent spending increase for 2010, with much of the money devoted to clean water projects, a Great Lakes restoration program and across-the-board increases for regulation, research and enforcement. The agency also gets $19 million to establish an inventory of greenhouse gas emitters as a prelude to a national carbon control regime.