President Barack Obama on Thursday outlined his first proposed budget, notably including billions of dollars for renewable energy investments and taking into account billions in expected revenues from a carbon pricing scheme.
In his remarks on Thursday, Obama also reaffirmed his directive to Congress to send him legislation putting a price on carbon. The “climate revenues” section of the budget projects $79 billion coming into the Treasury from the auction of carbon credits in 2012. The income ramps up slowly to $83 billion in 2019.
The inclusion of carbon auction revenue indicates that the administration is serious about getting a cap-and-trade plan through Congress as soon as possible, in order to begin implementing that program by 2012.
“Because our future depends on our ability to break free from oil that’s controlled by foreign dictators, we need to make clean, renewable energy the profitable kind of energy,” said Obama on Thursday. “That’s why we’ll be working with Congress on legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy.”
The Obama administration has indicated that they prefer a cap-and-trade system to regulate greenhouse-gas emissions, and Obama said on the campaign trail that he would like to auction off (as opposed to give away) 100 percent of the carbon credits. The numbers in the budget are definitely on the low-end of projected income from carbon auctions — the Congressional Budget Office previously estimated [PDF] that the permit auctions could raise up to $300 billion a year by 2020.
The budget sets aside $15 billion a year from those revenues for the next 10 years to develop technologies like wind, solar, and advanced automobiles, fulfilling a promise he made on the campaign trail last year. “It’s an investment that will put people back to work, make our nation more secure, and help us meet our obligation as good stewards of the Earth we all inhabit,” said Obama in a speech announcing the budget proposal.
The rest of the funds — $63.7 billion in 2012 — would be used for tax credits, which the Obama team is calling the “Making Work Pay” measure. The tax credit, they say, would offset the payroll tax for about about 95 percent of workers.
The proposal also allocates $19 million for a greenhouse-gas emissions inventory. “The data will aid in developing a comprehensive climate change plan to invest in clean energy, and instituting a broad national effort to reduce greenhouse gas emissions by 2020, and about 83 percent below 2005 levels by 2050,” the proposal says.
Climate change research gets a big boost as well. The National Oceanic and Atmospheric Administration is allotted $1.3 billion for new weather satellites, climate sensors, and climate and ocean research. There’s also a $1.5 billion increase in funding over the next two years for NASA to focus on climate research and develop new space-based sensors to “deploy a global climate research and monitoring system.” The budget also includes a doubling of the research budget of the National Science Foundation over the next decade, and directs them to create a climate-change education program for scientists and engineers.
Republican leaders balked at the inclusion of climate policy in the budget. “Cap-and-trade is code for increasing taxes and killing American jobs, and that’s the last thing we need to do during these troubled economic times,” said House Minority Leader John Boehner (R-Ohio) in a statement to the New York Times.
Green groups were quick to support the measures, however. “This is a smart policy decision and another important sign that [Obama] ‘gets it’ when it comes to building a new energy economy that will create millions of new jobs, reduce our dependence on oil, and protect our planet,” said Gene Karpinski, president of the League of Conservation Voters. “We urge Congress to pass this budget as soon as possible and to answer the President’s call for a cap this year.”