Obama Will Raise Revenue With New Climate Change Laws

President Obama announced Thursday that he would like to raise more than half a trillion dollars by 2020 from new climate-change laws. A top White House economic advisor told Senate staff that a proposed cap and trade system could raise “two-to-three times” the administration’s existing $646 billion revenue estimate for the next eight years, according to Dow Jones Newswires.

In his 2010 budget proposal, Obama plans to raise these funds by capping carbon dioxide and other greenhouse gas emissions and auctioning off the right to emit greenhouse gases, aiming to cut carbon dioxide emissions 14 percent by 2020 and 83 percent by 2050.

The deputy director of the White House National Economic Council, Jason Furman, told Senate staff that “the cap and trade system could actually generate between roughly $1.3 trillion and $1.9 trillion between fiscal years 2012 and 2019.” Dow Jones reported that five people at the meeting confirmed the statement.

This would be the largest revenue measure in U.S. history – at least twice as large as the largest to date, the $107 billion (in 2007 dollars) tax to pay for WWII. The White House claims that this new tax revenue would be dedicated to tax relief, but more than 42 percent of tax cuts in the Obama budget go to people who don’t pay taxes.

Senior officials said the $646 billion in estimated government revenues is based on an emission price of around $20 a ton for emissions, a number that could rise. Climate analysts predict a higher range of emission prices, which would change the burden on power industries.