President's Budget Draws Clean Energy Funds from Climate Measure
March 4, 2009
President Barack Obama released a rough outline of his proposed budget for fiscal year (FY) 2010 on February 26, and the document proposes to support clean energy development with a 10-year investment of $15 billion per year, generated from the sale of greenhouse gas (GHG) emissions credits. The funding hinges on the passage of an economy-wide GHG emissions program, under which the Obama administration intends to reduce U.S. GHG emissions to 14% below 2005 levels by 2020 and to 83% below 2005 levels by 2050. Under the proposed cap-and-trade program, all GHG emissions credits would be auctioned off, generating an estimated $78.7 billion in additional revenue in FY 2012, steadily increasing to $83 billion by FY 2019 (and presumably increasing more beyond that, although the budget proposal doesn't look any further). The president's proposed budget directs $15 billion per year of those funds toward clean energy technologies, while directing the remaining funds toward a tax cut. According to President Obama, the clean energy funds will be used "to develop technologies like wind power and solar power, and to build more efficient cars and trucks right here in America." See the president's budget announcement, as well as pages 21, 100-101, 115-116, and 123 of the president's budget proposal (PDF 1.8 MB). Download Adobe Reader.
The budget proposes to provide DOE with $26.3 billion in FY 2010, representing a 10% increase above the DOE appropriations for FY 2008 (Congress is currently working on the appropriations for FY 2009). Those funds would be in addition to the funds provided by the American Recovery and Reinvestment Act of 2009, which provided $39 billion for energy programs. Although the president's proposed budget doesn't provide a breakdown of the DOE funds, the proposal highlights loan guarantees for innovative energy technologies, as well as accelerated research, development, demonstration, deployment, and commercialization of clean energy technologies, including biofuels, renewable energy, and energy efficiency. The budget proposal also specifies $50 million for the U.S. Department of Interior to conduct resource assessments, environmental evaluations, and technical studies needed to support renewable energy development on public lands. See page 63-64 and page 79 of the president's budget proposal.
"President Obama's budget is up front and honest about the challenges America faces and makes hard choices to bring the deficit down," said Energy Secretary Steven Chu. "At the same time, it invests in our economic future by supporting clean and renewable energy sources that will put Americans back to work while ending our dangerous dependence on foreign oil. By investing in groundbreaking research, making homes and businesses more energy efficient and deploying solar, wind, biomass and other clean energy, this budget will help ensure that America once again leads the world in confronting our global economic, energy and climate challenges." See the DOE press release.