President Barack Obama’s fiscal year 2010 budget builds on the $91 billion of clean energy investments in the American Recovery and Reinvestment Act to continue investing in clean energy programs to create jobs, increasing national security, and reducing global warming. The new budget would also increase supplies of domestic oil and gas while eliminating some tax loopholes for big oil companies.
The most significant energy proposal in this budget is the inclusion of revenue in 2012 from the auction of all greenhouse gas emission allowances to major polluters under a cap-and-trade system. The budget assumes that this program will raise $646 billion between 2012 and 2019. Some of these funds would create jobs via a $120 billion investment in clean energy technologies over the same period. The auction revenue would pay for a "global warming tax cut" for working families with $526 billion. It would fund Making Work Pay, which provides a refundable income-tax credit for low-income working families. Any remaining funds would go to other families and businesses to offset higher energy prices.
The cap-and-trade revenue in the budget demonstrates that President Obama heeds warnings from scientists that we must adopt a greenhouse gas reduction program now to stave off the worst economic and security impacts of global warming. Inaction would harm our economy, security, and environment. As he promised during the campaign, Obama’s budget advocates a program that reduces greenhouse gas emissions by 14 percent from 2005 levels by 2020, and 83 percent by 2050.
Congress must work with the administration to promptly adopt a program to significantly slash greenhouse gas pollution. This would reduce the threat of fiercer storms, longer droughts, deeper floods, more smog, and new tropical diseases that scientists predict will occur without action. Global warming threatens our security as well: Warmer temperatures could lead to increased international instability due to drought, famine, and coastal flooding. This is why defense experts have called global warming a “threat multiplier.”
The budget also proposes tackling another long neglected problem—our inadequate, inefficient electricity transmission system. The American Recovery and Reinvestment Act includes $17 billion for new transmission and smart meters to increase the reliability and efficiency of electricity transmission and use. The budget builds on this investment with funds for research and development of smart grid and electricity storage technologies. Congress must reform the transmission planning, siting, and funding processes to ensure that these funds are well spent.
Another area covered in the budget is a plan to develop a more effective nuclear waste disposal process. The transportation and disposal of high-level nuclear waste remains a major environmental threat. The proposed Yucca Mountain storage facility poses a real risk of truck accidents or railroad derailments that could cause catastrophic nuclear waste spills en route. Yucca is also too small to store waste produced in the future.
An essential part of the Obama energy budget is to end tax breaks and recover lost royalties from big oil companies. The big five oil companies—BP, Chevron, Conoco Phillips, ExxonMobil, and Shell—made profits totaling $666 billion during the eight years of the Bush administration. Much of this money came from middle-class households that were forced to pay record prices for gasoline. The budget would raise $32 billion over 10 years by closing these loopholes.
The proposed budget would also ensure a continued supply of domestic oil and gas from leases held by big oil companies, partially by including a new fee “on non-producing leases in the Gulf of Mexico.” This should spur oil companies to either develop or return leases.
President Obama’s proposed energy budget is a ray of sunshine after an eight-year blackout. Congress must now make this clean energy future a reality.
Daniel J. Weiss is a Senior Fellow and Director of Climate Strategy at the Center for American Progess.
More on President Obama’s budget blueprint:
Overview: A New, Ambitious Course of Action, by Michael Ettlinger
Defense: Obama’s Defense Budget Is on Target, by Lawrence J. Korb
Education: Investing Wisely in Our Children, Cynthia G. Brown and Melissa Lazarín