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Obama Counting on Cap-and-Trade

By Tom LoBianco
The Washington Times
February 25, 2009


President Obama is banking on $300 billion to come in by 2022 from a
cap-and-trade plan to reduce greenhouse gases, according to a source with
knowledge of the president's proposed budget.

Mr. Obama expects money from the climate-change proposal to start rolling in by
2012, and that amount would come in over the subsequent 10 years as companies
purchase carbon offsets, according to the source.

The budget's assumption of money from a revenue stream that does not yet exist
provides a concrete indication that Mr. Obama expects a cap-and-trade system to
be in place soon although Congress still must shape, write, debate and decide on
a timetable for legislation that likely will be divisive even among Democrats.
"As someone who is very involved in the legislative debates on this, it's just
very premature to be having any number like that," said Jeff Holmstead,
Environmental Protection Agency assistant administrator during the Bush administration.

"I do think it will be eye-opening to a lot of people to find out that
cap-and-trade is really about raising taxes," said Mr. Holmstead, who now works
with the energy lobbying firm of Bracewell and Giuliani.

Cap-and-trade plans work by having the government sell to private enterprises
the right to emit a certain amount of carbon dioxide or other gases. Those
emission rights can then be bought by companies that wish to emit more from
companies that can emit less than their targets.

A White House spokesman did not immediately return calls for comment Tuesday,
although Obama spokesman Robert Gibbs confirmed to Reuters news agency that
money from a cap-and-trade plan would be part of the president's budget.
Mr. Obama would not be the first president to assume in his budget a nonexistent
revenue stream. President Bush included in several of his budgets the expected
fees from his proposal to drill in the Alaska's Arctic National Wildlife Refuge,
though those plans never materialized during his presidency, thus neither did the money.

Members of the House and Senate have yet to introduce climate-change
legislation, although House Energy and Commerce Committee Chairman Henry A.
Waxman, California Democrat, has said he plans to have a cap-and-trade bill
passed out of his committee by Memorial Day.

Senate Majority Leader Harry Reid, Nevada Democrat, has said he expects to
tackle global warming later in the summer, although Senate Environment and
Public Works Committee Chairman Barbara Boxer, California Democrat, has said she
doesn't expect to pass a climate-change bill until next winter.

Mr. Obama promised during the campaign to reduce carbon-dioxide emissions by 80
percent by 2050 and Democratic leaders on Capitol Hill have said a cap-and-trade
system is more likely to pass both the Senate and the House than other plans,
such as a carbon tax.

A spokesman for Mr. Reid said his office would wait to comment until the budget
is introduced Thursday.

A spokeswoman for Mr. Waxman said the lawmaker could not immediately be reached
for comment.

 

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