"U.S. Budget Update Stands Pat On CO2 Permit Auction"

"The White House budget update released on Tuesday still reflects a controversial Obama administration plan to combat global warming by auctioning all permits to emit greenhouse gases even though Congress has said it will give away a substantial portion to industry.

The mid-session budget review from the Office of Management and Budget estimates the government will raise $627 billion in revenue between 2012 and 2019 from a so-called cap-and-trade system requiring companies to buy permits for the carbon gases they spew into the atmosphere.

However, analysts say it is unlikely lawmakers will approve any climate control system that would force polluters to initially pay for the majority of carbon permits.

The administration's budget estimates "represent an ideal, but they don't appear to be real," said Kevin Book, an energy analyst for ClearView Energy Partners.

Lawmakers on both sides of the aisle have balked at President Barack Obama's campaign pledge to support climate legislation that would auction 100 percent of carbon permits."

Ayesha Rascoe reports for Reuters August 26, 2009.

Source: Reuters, 08/26/2009