Peter Orszag, at least, is putting the Obama administration right out there for a battle over carbon dioxide allowances. Speaking to the House Budget Committee today, he defended the administration's proposed budgeting of 2012 revenues from an allowance market in which all allowances are auctioned. None allocated free of charge.
"If you didn't auction the permits, [it] would represent the largest corporate welfare program that's ever been enacted in the history of the United States," he said.
Even though Duke Energy's chief executive, Jim Rogers, disagrees with that view, he had conciliatory words today for the administration's proposal. "Actually, I think we'll have a more honest conversation faster as a consequence of it," said Rogers in an interview with our colleague Cathy Cash after a talk on containing costs at the US Climate Action symposium on Capitol Hill. "I think what he's done is a good thing."
Rogers said a 100% auction of carbon dioxide emission allowances would result in a disproportionate tax on the 25 coal-dependent states. An emissions market must be a "blended transition," where emitting industries are given allowances but those free emission rights to pollute shrink over time as the cap on pollution tightens, he said.
So he is diametrically opposed to the 100% auction. But rather than make it more difficult to get that message through to the Democrat-led Congress, Rogers believes, he said, that Obama's call against allocating allowances to emitters will get policymakers working sooner on how to transition to a low-carbon economy. "Now its focuses everybody's mind not only on the environmental aspects of it but the transition," said Rogers. "He's done a good thing."
At the conference, Rogers spoke against using revenue from Midwestern states that built coal-fired plants to meet energy policy demands of the 1970s to reward low-emission states like California with per capita payments or to finance federal programs unrelated to climate change. Instead, he said that revenue raised from coal-fired plants in Ohio, for example, should stay mostly within that state to help develop carbon capture technologies there or other activities related to meeting a cap on carbon emissions.
"If we believe climate change is the problem, I think we ought to have programs that dollars generated from [those programs] …ought to be used to solve the problem," said Rogers. "Any other [appropriation] is unacceptable."
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