CBO tallies stimulus-aided jump in climate spending

White House officials, when boasting about their work on climate change and energy, like to say the big 2009 stimulus law was a big step forward.

They’re right, insofar as it represented a massive jump in federal spending on climate change programs. A new Congressional Budget Office report tallies the extent of the increase.

“From 1998 through 2009, appropriations for agencies’ work related to climate change totaled about $99 billion (in 2009 dollars); more than a third of that sum – $35.7 billion by CBO’s estimation – was provided in the American Recovery and Reinvestment Act of 2009,” states a post on CBO’s blog about the new study.

A side note -- the study looks at the merits and shortcomings of using tax policy as a way to curb greenhouse gas emissions. It notes that many analysts see tax credits as “inefficient tools” to promote reduced emissions.

From the study:

For example, conserving home heating oil by installing solar heating systems is encouraged by a tax credit, but turning thermostats down and wearing sweaters is not, even though doing so could achieve substantial reductions in GHG emissions at a lower cost. Tax preferences that are intended to encourage consumers and producers of electricity to choose technologies that reduce emissions vary widely in the amount of GHG emissions curtailed per tax dollar forgone. According to one calculation, the subsidy per ton of greenhouse gases not emitted can vary by about 50 percent from the same tax provision, depending on whether it is used for wind or geothermal technology. Most analysts believe that better results might come from increasing the price of GHG emissions because market forces tend to equalize the cost of reducing GHG emissions as consumers and producers respond to price signals. Despite their limitations, tax credits and deductions have helped encourage investment in renewable sources of energy.