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President Obama's proposed budget laid out his assumptions that a new cap-and-trade program for greenhouse gas emissions would begin to generate billions of dollars in revenue as companies are forced to comply with a market-based program.
Obama's budget includes several principles on what the administration wants to see out of a cap-and-trade program, including emission targets that cut U.S. greenhouse gas levels 14 percent from 2005 levels by 2020. Obama also wants midcentury cuts of 83 percent from 2005 levels.
The budget also includes revenue from a national cap-and-trade system for greenhouse gas emissions, which would come from auctioning off emissions permits to industries. The climate program would generate nearly $650 billion between 2012 and 2019, according to Obama's proposal.
About $80 billion of the climate revenues would go toward Obama's proposed middle-class tax cut each year beginning in 2012, the draft says, and the government would spend $15 billion per year on "clean" energy technologies. In his address to Congress on Tuesday, Obama said those technologies would include wind power, solar power, advanced biofuels, "clean coal" and more efficient cars and trucks.
Obama's proposed cap-and-trade revenues immediately drew the ire of House Minority Leader John Boehner (R-Ohio).
"'Cap-and-trade' is code for increasing taxes, killing American jobs, and raising energy costs for consumers," Boehner said in a statement. "Middle-class families are struggling during this recession, and the last thing they need is even higher costs of living and weaker job security, which is exactly what 'cap-and-trade' would deliver."
But White House Office of Management and Budget Director Peter Orszag insisted that Obama's budget takes into account projected increases in Americans' energy bills as utilities pass on their compliance costs. The OMB chief said Obama's cap-and-trade program would provide taxpayers with direct payments to help them cope with higher energy prices.
"Let's remember what we're trying to accomplish here," Orszag said. "We're trying to reduce our dependence on foreign oil. We're trying to address global climate change. And we're trying to do that in a fiscally responsible way."
The budget also calls for a $19 million increase for U.S. EPA to use on a greenhouse gas emission inventory. The inventory is expected to identify baseline levels of carbon emissions and set the foundations for a national cap-and-trade program.
Lawmakers, of course, will have a big say in shaping Obama's cap-and-trade plan, including how to distribute hundreds of billions of dollars in new revenue, Orszag said.
"We're going to work interactively on specifics with the Congress," he said. "I'm sure there will be enough there to pay for the things we've identified."
Reprinted from Greenwire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500