Peter Orszag on Cap-and-Trade

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Thursday, February 26, 2009 at 3:04 pm

Office of Management and Budget Director Peter Orszag — who was as involved as anyone with the drafting of the budget outline President Obama rolled out this morning — just held a conference call with progressive media outlets and bloggers, and I took the opportunity to ask him about cap-and-trade in the budget.

He explained the mysterious math that led to the $646 billion revenue projection from selling allowances over the next ten years and revealed it to be … well, pretty mysterious.

“What we specified in the budget is a cap-and-trade target,” Orszag said. There are a number of paths to reach this target, and the budget team did not get into specifics when creating its projection. “Under any plausible path,” Orszag said, “there is sufficient funding to do the energy efficiency investments” and finance tax credits for low- and middle-income workers, as specified in the budget.

“We are expecting that cap-and-trade will raise at least $600 billion,” he continued, adding that any additional resources would be used to offset higher energy costs for households across the country.

Given the uncertain future of cap-and-trade in the face of heavy Republican opposition, I asked him if the administration was sufficiently confident the policy would be enacted that it felt comfortable tying $15 billion a year in clean energy investments to revenue from cap-and-trade.

His response: “We desperately want and need the energy efficiency improvements … and we think this is the most sensible way of financing those investments along with ‘making work pay.’”

A brief note: The budget outline sets aside $120 billion for “clean energy technologies,” but Orszag continually referred to this provision as a plan for “energy efficiency” improvements/investments. That leaves some uncertainty as to exactly what this funding will be used for. Or maybe the budget man, with dozens of 11-figure numbers floating around in his head, simply misspoke. Overall, though, his comprehensive understanding of all the issues contained in the budget was thoroughly impressive.

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Comments

5 Comments

AMERICAN NONSENSE » Orszag on the Obama Budget: New Taxes on the Wealthy for Health Care Reform
Pingback posted February 26, 2009 @ 7:33 pm

[...] topics covered included a question from The Washington Independent’s Aaron Wiener on cap and trade, where Orszag stressed that specifics of the proposal needed to be worked out with Congress, but [...]


PoliTrix » Blog Archive » Orszag on the Obama Budget: New Taxes on the Wealthy for Health Care Reform
Pingback posted February 26, 2009 @ 8:02 pm

[...] topics covered included a question from The Washington Independent’s Aaron Wiener on cap and trade, where Orszag stressed that specifics of the proposal needed to be worked out with Congress, but [...]


CTF
Comment posted February 27, 2009 @ 8:58 am

A cap and trade isn't the only viable option. A revenue-neutral carbon tax is being supported by a growing number of scientists, economists, opinion leaders and politicians on both sides of the aisle. I think it's premature to count on cap and trade revenue when Majority Leader Reid and Energy Secretary Chu are both leaving the door open to a carbon tax.


jC
Comment posted March 13, 2009 @ 3:33 pm

In other words, Orszag and teem pulled an impressive sounding number out of their ass. Cap and trade (or any carbon tax for that matter,) is a scam, fueled by bad science and promoted by market abusers to separate the poor from their money. Google “temperature change history” and you find out that man-made global warming is myth, just as much myth as Al Gore inventing the Internet. Better buy your mukluks now, because the next Ice Age is coming soon and with all those carbon credits that need to be paid, the human race is screwed.


jC
Comment posted March 13, 2009 @ 10:33 pm

In other words, Orszag and teem pulled an impressive sounding number out of their ass. Cap and trade (or any carbon tax for that matter,) is a scam, fueled by bad science and promoted by market abusers to separate the poor from their money. Google “temperature change history” and you find out that man-made global warming is myth, just as much myth as Al Gore inventing the Internet. Better buy your mukluks now, because the next Ice Age is coming soon and with all those carbon credits that need to be paid, the human race is screwed.


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