Along with a focus on the development of a clean energy economy, President Barack Obama’s proposed $3.55 trillion budget for 2010 factors in a carbon cap-and-trade system to fund investments in clean energy, and it slashes funding for the proposed Yucca Mountain nuclear waste repository.

The proposed budget (PDF), which will now go to Congress for further discussion, designates $26.3 billion for discretionary spending at the Department of Energy (DOE) along with $39 billion for energy programs identified in the recent stimulus bill.

It proposes to provide “significant increases in funding for basic research and world-leading scientific user facilities” and to double federal investment in the basic sciences, substantially increasing support for the Office of Science and for international science and energy experiments.

The budget also supports loan guarantees for projects relating to renewable energy, transmission, and carbon sequestration. The administration said, without providing a concrete figure, that the budget would boost the $3.4 billion provided in the American Recovery and Reinvestment Act of 2009 to support deployment of carbon capture and storage technologies.

Additionally, it builds on the $11 billion provided in the Recovery Act to support smart grid technologies, transmission system expansion and upgrades, and research in energy storage and cyber-security.

Factoring in Proceeds from a Carbon Cap-and-Trade System

To fund investments in clean energy, the Obama administration proposed to enact a carbon cap-and-trade system, projecting that proceeds from the 100% auction could total $646 billion between 2012 and 2019. It anticipates that this revenue could provide $150 billion of clean energy funding by 2022—or $15 billion over 10 years, starting in 2012. The balance would be returned to taxpayers.

In the budget, the administration also laid down plans to develop an economy-wide greenhouse gas (GHG) reduction program, saying that it would work with key stakeholders and Congress to reduce U.S. emissions by about 14% below 2005 levels by 2020, and 83% by 2050.

This “policy approach … dramatically reduced acid rain at much lower costs than the traditional government regulations and mandates of the past,” the budget said.

Along with expanded support at the Energy Department for technologies that mitigate emissions, the budget also proposes new funds for a NASA space-based GHG monitoring system, and for the Interior Department to tackle the impact of climate change on public lands.

It also asks for $19 million to allow the Environmental Protection Agency (EPA) to work on a GHG emission inventory and to work with industry sectors to report emission data. In total under the budget, the EPA could receive $10.5 billion—a 34% increase over the amount that will likely be enacted for 2009.

The plan incited heated reactions from the power sector. Duke Energy CEO Jim Rogers, who supports a carbon cap, told Bloomberg that he was concerned that some of the money would not be used to promote clean energy. He also said that consumers in the 25 states that rely on coal-fired generation could see up to a 40% increase in electric bills, which would force them to “carry a heavy burden and then not get the money to help them solve the problem.”

Yucca Mountain Funding “Scaled Back”

While it increases funding for efforts to thwart nuclear proliferation and secure spent nuclear fuel stockpile safety and security, the 2010 budget said simply that “The Yucca Mountain program will be scaled back to those costs necessary to answer inquiries from the Nuclear Regulatory Commission, while the Administration devises a new strategy toward nuclear waste disposal.”

The DOE submitted its application to begin construction of the repository at the site in Nevada in June 2008. Last year, the government allocated $495 million for the project, saying the funds would be used to “continue development of the nuclear waste repository and support defense of the license application while under Nuclear Regulatory Commission review.”

Obama has consistently said that he objected to the repository. In a May 20, 2007, letter to the Las Vegas Review-Journal, then-candidate Obama said that, despite billions of dollars being spent on the project, there were still questions about whether nuclear waste could safely be stored there.

“I believe a better short-term solution is to store nuclear waste on-site at the reactors where it is produced, or at a designated facility in the state where it is produced, until we find a safe, long-term disposal solution that is based on sound science.

“In the meantime, I believe all spending on Yucca Mountain should be redirected to other uses, such as improving the safety and security of spent fuel at plant sites around the country and exploring other long-term disposal options,” he wrote.

Sources:, Bloomberg, Las Vegas Review-Journal