Could be on top of a cap-n-trade or carbon tax returned to taxpayers.

There’s widespread consensus – including among Obama advisers like White House science adviser John Holdren, Sec. of Energy Steven Chu, and Obama campaign energy adviser Dan Kammen – that public investments in clean energy R&D alone need to rise to $15-30 billion annually, putting them on the same scale as other national innovation priorities (e.g. health research at NIH, military R&D, etc.) and past R&D initiatives (e.g. Apollo, Manhattan, Project Independence, etc.).

Likewise, building a modern electrical grid, including long-distance transmission expansion and integration of smart grid (and probably storage) will cost on the scale of hundreds of billions over the coming decade or two. Not all of that will have to come from the public sector, but a sizable chunk will, maybe $5-15 billion annually.

Incentives to spur the deployment of emerging clean energy technologies and drive down their cost are also necessary, even with a cap and trade program in place. The EU’s ETS doesn’t preclude the necessity of a roughly 50 cents/kWh feed-in tariff for solar in Germany, for example, or more modest feed-in prices for wind and solar across the EU nations. The three-year PTC expansion in the stimulus is projected to cost $13 billion over the next ten years, and the cost of supporting emerging renewable energy technologies will only increase as the scale of their deployment ramps up.

Spurring energy efficiency will require major public investments in low-cost financing to bring down capital barriers for consumers as well. Architecture 2030 called for a $171 billion, two-year stimulus investment in efficiency, for example, while Green for All, COWS, CEPR and CAP have called for $3 billion annual investment to underwrite a $50 billion public revolving loan fund for efficiency retrofits. There’s at least $8.5 billion in annual investments in efficiency alone in the stimulus, and that money just begins the task of building a more efficient economy.

No wonder the Apollo Alliance, Breakthrough Institute and Center for American Progress have all called for public investments in clean energy on the scale of $50 billion annually. $15 billion a year simply falls far short of what is needed.

So what is it going to take to get for Obama to double, triple or even quadruple his commitment to public investments necessary to spark a clean energy economy? I get that there’s politics involved here, but if the money doesn’t come from carbon auctions, it’s gotta come from elsewhere. Obama says sparking a clean energy economy is his top priority (after getting the economy out of crisis). It’s time for him to put the money on the table.

[JR: I think you are confusing clean energy R&D with clean energy R&D&D&D. Thanks to Obama (and Congress), we will be spending something close to $50 billion a year for this year and next in total public investment for clean energy.

But a strong cap and a serious price for carbon dioxide are certainly more important than the exact level of public investment. Ultimately, the private sector will need to be spending 10 to 100 times what the public sector does.]

“Another possible use of revenue from auctioning allowances is to offset the effects that higher energy prices would have on low- and moderate-income households. Although such price increases encourage greater efficiency in reducing emissions, and are thus essential to the success of a cap-and-trade program, they would impose a disproportionate burden on low- and moderate-income households. The Congressional Budget Office has found that if the allowances were sold and the revenue used to provide equal rebates to every household, lower-income households could be financially better off because the rebate would be larger than the average increase in their spending on energy-intensive goods. Alternatively, the distributional consequences could be offset by increasing the earned-income tax credit or boosting food stamp benefits. ”

http://www.washingtonpost.com/ wp-dyn/ content/ article/ 2008/ 07/ 08/ AR2008070802465.html

I’m not sure about your comment here:

“So, yes, we will see a cap-and-trade bill on Obama’s desk in FY2010 — between October 1, 2009 and September 30, 2010. ”

What gives you high confidence that it will happen? I’m worried about its fate in the Senate, where Republicans can fillibuster. There are conservative Democrats from coal-rich states that might join them.