In my original post about Obama’s budget, I looked at the issue of how much of the auction revenue ought to be rebated directly to taxpayers and how much should be devoted to investments in green infrastructure, etc.
The Center on Budget and Policy Priorities found that with 55 percent of auction revenue, those in the bottom 60 percent of incomes in the U.S. could have their increased energy costs entirely offset. That’s pretty much all of lower-income and middle-class taxpayers.
So what is Obama proposing to do with the revenue?
The short answer is: $15 billion a year goes to green investments and the rest goes to "Making Work Pay," i.e., offsetting payroll taxes. (See p. 3 of the Summary Tables [PDF].) That stays true over the next ten years, which means that the percentage of revenue rebated rises steadily.
So, in the first year, out of $78.7b in revenue, $63.7b is rebated—roughly 81 percent. In 2019, out of $83b in projected revenue, $68b is rebated—about 82%. But it’s important to note that the $15b in investments is held steady, regardless of total revenue. If revenue rises faster and farther than these projections—and these are extremely conservative projections—then the percentage rebated could get up to 85, 90, 95 percent.
That is, in my humble opinion, bad policy. But there it is.
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Comments
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Ted Clayton Posted 8:33 am
26 Feb 2009
Not only is it a bad policy, it looks like Obama was bum-steered, politically. The GOP will see through this from a mile off. They'll have his lunch eaten before morning coffee break, at this rate.
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ids Posted 11:02 am
26 Feb 2009
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Sean Casten Posted 10:30 pm
26 Feb 2009
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ids Posted 10:42 pm
26 Feb 2009
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Steven T Posted 1:31 am
27 Feb 2009
Now, perhaps they've gone too far in the other direction. But remember that Congress will weigh in. If there's the political will, the proposal will be improved. And if not, then a tougher proposal would have been DOA anyway.
The tide may have turned on global warming, but we don't yet know how far we can push politically.
The other factor that may be worth mentioning is that the proposal essentially amounts to a back door pollution tax that has the potential to eclipse more conventional taxes, e.g., the payroll tax. Is that not the general direction we wish to go? Might this be an expedient way to take the first step down that road?
That's a genuine question rather than a veiled comment.
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ids Posted 3:00 am
27 Feb 2009
the ignorance and arrogance of the American green al-qaeda never fails to amaze me, and my expectations are very low.
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BILL HANNAHAN Posted 3:58 am
27 Feb 2009
But get nothing back.
Things Everybody Should Know About Energy
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Ted Clayton Posted 4:47 am
27 Feb 2009
Certainly, your "green al-qaeda" indulgence exceeds the exaggeration Steven T. may have used in his rhetoric.
There is no Al Qaeda here, and excess like that just gives the opposition a bad name.
... there is no Hitler here, no Holocaust, no children being sacrificed, no furry little cute animals being injured.
Use a few more words, make your point without discrediting yourself.
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redpanda Posted 6:02 am
27 Feb 2009
I know that since then we've seen the passage of a 700 billion dollar stimulus law, but 150 billion dollars is still a lot of money.
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Curtis Moore Posted 7:03 am
27 Feb 2009
First, the budget proposal addresses--unless I missed something--only carbon dioxide. CO2 has a lifetime of 50 to 3,000 years, so slashing emissions--even if the Obama plan would have that result, which is a pipe dream--would have no near-term benefit. As Susan Solomon, one of America's most talented and experienced atmospheric scientists, explained recently "We have to think about it much more like nuclear waste than, like say, smog or acid rain," Solomon, a senior scientist for the National Oceanographic and Atmospheric Administration, added "What we're doing with carbon dioxide is forever."
The result of the Obama budget will not be a safer future, but instead one that is vastly more dangerous. Indeed, a case can be made that enactment of a U.S. global warming law based on the Obama approach could prove to be a death warrant for the world's inhabitants, because as happens so often environmental matters, the first victim of politics has been science. Carbon dioxide is not the squirrel humanity should be chasing right now.
There are other causes of global warming with lifetimes of a few minutes to a few years. Black carbon, or soot, emitted in vast quantities by diesels and coal-fired power plants, lasts one or two weeks. Ozone, or smog, lasts two to three weeks and carbon monoxide, which indirectly causes warming, a few minutes. Other causes of warming last longer--methane, or natural gas, emitted by refineries, landfills, sewage plants--lasts 8 to 9 years. HFC-134a, used in the air conditioners of cars and trucks, lasts for about 14 years (its use in new vehicles is banned in Europe starting in 2011).
These pollutants are, in the aggregate, the cause of most warming currently being experienced, though carbon dioxide will be the dominant cause in the future. What is required is not a strategy that targets a single cause of global warming or, even six, as the Kyoto Protocol does, because global warming has not only arrived, its pace is accelerating.
Reducing these non-CO2 causes of global warming will yield immense benefits in addition to cooling. Black carbon, an extremely fine particle, kills people. Globally, indoor exposures to black carbon from cooking and other fires, kill an estimated 5 million children a year. Ozone causes and aggravates asthma, while increases in carbon monoxide are linked to death from congestive heart failure.
The need for immediate and substantial cuts in short-lived causes of global warming is urgent because the planet is racing toward so-called "tipping points," beyond which recovering the natural climate will be impossible. The air, ocean and soils are warmer (and the stratosphere cooler, because heat is being trapped at lower levels).
The Arctic and Antarctic are warming and melting, as are as glaciers and winter snow packs throughout the world. Animal and plant populations are shifting, coral is dying and so are planktons, tiny oceanic animals that are the base of the world's food chain. As tundra thaws, it releases methane and carbon dioxide, which causes even more warming. When ice or snow melt, dark soils or water are exposed, which absorb more solar energy, causing additional warming. As oceans acidify because of the carbon dioxide they absorb, the ability of small animals to turn it into shells--coral and sea urchins, for example--declines, make the waters even more acid.
The true danger of global warming, certainly in the near term, is not that the earth will warm gradually, but that it will fall over a cliff. Change in nature is rarely gradual. Snow crashes down a mountainside in an avalanche, lighting thunders through the air at the speed of light and the Twin Towers--some object to this comparison in poor taste, but I find that it causes a knot of fear in the stomach of listeners, which is what they should feel when discussing global warming--stood, stood and stood, then collapsed on themselves as some small tipping point was passed.
Attacking only carbon dioxide, or even principally carbon dioxide to the exclusion of black carbon, ozone, methane, HFC-134a, leaves humanity unnecessarily exposed to the dangers of tipping points and prolongs warming at a time when it could be slowed and perhaps even reversed. It also means that millions of people are being killed unnecessarily.
Auctioning emissions is not necessarily a bad idea, but rebating the money to individuals is. The dough should be given to those who are generating electricity with less or even no air pollution. This would provide not only a negative incentive for polluters, but a positive incentive to non-polluters. Not a single cent should stick to the hands of the government--at least that is the majority view in the Scandinavian countries where feebates have been enormously successful.
Is there anybody out there who is paying attention to science?
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