WASHINGTON President Barack Obama's estimate of $646 billion in revenue for the first years of a carbon-capping program to curb climate change is realistic or possibly a little low, policy analysts said on Thursday.
Obama's budget for 2010 projects this revenue, from 2012 through 2019, will fund $150 billion in clean energy technology investments over 10 years and a tax credit to help Americans make the transition to a less carbon-intensive economy.
"I don't think it's overly optimistic at all," said Brian Murray, director for economic analysis at the Nicholas Institute for Environmental Policy Solutions at Duke University.
"It's on the conservative side," said Tim Profeta, the institute's director. Both spoke in a telephone interview.
"From a substantive standpoint, the numbers are based on a good analysis," said David Gardiner, senior adviser to the Ceres coalition of investors, environmental groups and others aiming to curb climate change.
The $646 billion figure, spread over eight years, presumes that a U.S. law to limit carbon emissions will be in place by 2012, and Obama has said he will work with Congress to make this happen.
Obama has said he wants a so-called cap and trade system that would put a price on emissions of climate-warming carbon. Companies that emit more than the limit would have to buy emission permits; companies that emit less could sell emission credits.
It would mean about $80 billion in revenue annually, the Nicholas institute's Murray said, with each ton of carbon emissions priced at $15 at the start of the eight-year period. Because the goal is to reduce carbon emissions, the carbon price would rise over the eight years.
Cap-and-trade legislation that narrowly failed in the Senate last year foresaw higher revenues based on a carbon price starting at $18 a ton and rising from there.
The Obama budget envisions that some revenue from the emissions permits would be returned to individuals in an idea known as cap-and-dividend. Democratic U.S. Representative Chris Van Hollen of Maryland announced on Tuesday he plans to introduce a cap-and-dividend bill.
Meanwhile, Senator Barbara Boxer, a California Democrat who shepherded a cap-and-trade bill to the Senate floor last year, has vowed to introduce carbon-curbing legislation this year.
Environmental groups were jubilant at Obama's proposals on climate change.
"It's a hugely important policy direction and another sign that Obama gets it when it comes to building a clean energy economy," said Gene Karpinski, president of the League of Conservation Voters.
"Wall Street and Washington alike understand that the question is no longer if or when, but only how we will tackle global warming and build the clean energy economy that will rescue us from economic collapse," said Sierra Club's Carl Pope.
Shell Oil Company president Marvin Odum also favors cap-and-trade.
"The only really wrong thing to do, is not to do anything," Odum told a congressional hearing on Wednesday. "The reason I like a cap and trade system is it directly addresses the problem. So when money goes into buy these credits, then that money goes directly to reducing carbon emissions."
The budget also raises the budget for the Environmental Protection Agency to $10.5 billion, a $3 billion rise from the previous year, with a $19 million increase for "a greenhouse gas emissions inventory and related activities that will provide data critical for implementing a comprehensive climate change bill," the agency said in a statement.
(Editing by Jackie Frank)