President Obama's Climate Plan and Your Pocketbook

A national system to discourage global warming pollution by imposing extra costs on companies that burn coal and oil could generate billions of dollars a year for the federal government. These costs -- kind of like fees for polluting -- would come from the auctioning of pollution credits. But where should all those billions of dollars go? Toward building wind turbines, solar panels and government programs to encourage energy efficiency?  Or should the cash go right into the pockets of consumers?

It’s an important question for people living in the Chesapeake Bay region, because our shorelines make us especially vulnerable to the rising sea levels caused by global warming. And the debate is hot right now because the Obama Administration and Congress are promising action on creating a “cap and trade” or pollution credit system to fight climate change.

President Obama, in his speech yesterday on his proposed 2010 budget, said he wants to start a national “cap and trade” system. Such a system would make companies that burn coal, oil and other fuels that produce global warming pollution buy credits (basically pay fees) and slowly reduce their emissions by 83 percent by 2050.

Obama proposes to direct more than 80 percent of the money from these fees back to consumers in the form of tax cuts for the middle class (about $65 billion a year). Plus he suggested there might be more relief for families of modest income that suffer higher utility bills because of the fees on utilities.

A much smaller portion of the money would go to government programs to encourage alternative fuels.

“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,” Obama said. (To read a full transcript of his comments, click here.) “And to support this effort, we'll invest $15 billion a year for 10 years to develop technologies like wind power and solar power, and to build more efficient cars and trucks right here in America.”

Obama’s idea is similar to that of Maryland U.S. Rep. Chris Van Hollen, who is suggesting a “cap and dividend” program that would return 90 percent of the money raised directly to American families.

David Roberts writes on the blog Grist  that he doesn’t like rebating all this cash, because that means the money often won’t be used to help the environment. After all, the money comes from polluters – shouldn’t it be used to stop pollution?

“Rebates should be the minimal necessary to compensate those hardest hit by higher energy prices, and the rest of the revenue should go to investments in a green economy,” Roberts writes. “After all, the best way to provide long-term relief to American consumers is to accelerate the clean energy transition.”

Bay Daily believes that, in addition to encouraging alternative energy sources, some of the federal money should go toward dealing with the damage caused by global warming. We should rebuild wetlands that are being flooded by rising sea levels, to provide more habitat for wildlife and filter and clean the Bay. We should plant trees along streams, to cool them off for trout other fish, filter the waterways and absorb carbon dioxide pollution.

It’s an issue that we all might have to wrestle with soon, if Congress moves fast on climate change legislation.

Bay Daily readers, what do you think?

Comments

[Michelle Donahue]

I researched this very thing yesterday after reading over the 2010 budget summary and noticing the line-item "climate revenue" pop out at me. It turns out there is a regional cap-and-trade collective, of which Maryland is a member, the Regional Greenhouse Gas Initiative (www.rggi.org) -- they have a wealth of information on how this "pilot program" works, even though the cap limits are much higher than the proposed national goal, and the credits are being auctioned off at a much lower rate than the national plan proposes to do ($3 per ton of carbon under RGGI's plan, vs. $15 per ton if it were to be implemented nationally.)

Maryland's own rules for participation would require any power plant that produces 25 or more megawatts to purchase carbon credits. I think it's a good idea to start, though it will probably have to evolve pretty quickly once the market is up and running to prevent market gluts and price drops. (http://michelledonahue.wordpress.com )

[Michelle Donahue]

Oh and two other things: the RGGI program also has "exceptions" that allow emitters to contribute towards wetland/marshland and forest restoration; Maryland's commitment for its share of auction profits is to put them entirely back into efficiency research.

[Michelle Donahue]

I enjoy reading your posts -- very informative and inspiring to the intellect. I hope others respond, too.

Good luck!

[wench costume]

This is a very good way in fighting pollution as long as the money goes in the right way also.

[Nursing gowns]

Hmm that's a lot of money..Hmm 80% of commission? That's so big.. Hmm i like this post..So interesting!! =) Keep posting!