Obama's Budget Includes Outline for Carbon Market
Photo via DC Streets Blog
Last year, a minor ruckus--I say minor because over the course of the year and a few town hall 'debates' about 'death panels' later we got to see what real ruckuses looked like--ensued when the Obama administration included an outline for a cap and trade program in his budget. Republicans were angry that it projected that there would be $646 billion generated in revenues from a carbon market, since no legislation capping carbon emissions had been passed. This year, in order to avoid such a brouhaha, Obama has included the outline for the program still--but none of the projected revenue it would generate for the federal government.Here's Reuters:
The White House called on Monday for Congress to endorse a "comprehensive market-based policy" to fight climate change, while dropping from its proposed budget projected revenues from a cap-and-trade system many lawmakers oppose.So does the move mean anything at all, besides demonstrating that the president still supports the idea and is open to the possibility? Or has he just learned a lesson in appearing presumptuous before a hostile opposition? Or is Obama even scaling back his faith in a cap and trade system's chance of passing the Senate? So many questions! Let's see what Reuters thinks:
..."Unlike last year, we do not show an assumed amount of cap-and-trade revenue since the exact nature of the legislation remains in flux," [an administration] official told Reuters. The budget tripled loan guarantees for new nuclear power plants to $54.5 billion, however, in a bid to win votes for the bill from Republican lawmakers.
After all, as one energy expert points out, the intention of creating a carbon market was never going to be generating income for the federal government:
Some interpreted his omission of cap-and-trade as a signal that he would not actively pursue wide-ranging climate legislation this year. The White House rejects that interpretation. The proposed budget for the fiscal year to September 30, 2011, said the administration would push for a market-based mechanism to reduce U.S. greenhouse gas emissions roughly 17 percent in 2020 and more than 80 percent by 2080 compared to 2005 levels.
"I don't think you can read anything into the budget about the administration's wavering on a commitment on a comprehensive climate bill," said Evan Ard from Evolution Markets, a carbon and energy broker based in New York. "The idea is to set a target for reducing emissions and setting up a program that hopefully allows you to do it at low cost, it's not about generating revenue."Indeed. So Obama has basically included a framework in his budget, to allow for a carbon market to operate should the Senate pass energy reform this spring. 'Tis nothing to get excited about, really--one way or the other.