April 12, 2010

Study Examines Federal Spending on Climate Change Programs

Agencies may miss spending deadline for ARRA money

The federal government has committed several billion dollars in annual spending, mostly by the Department of Energy and NASA, on projects to expand the understanding of climate change or to reduce carbon dioxide and other greenhouse-gas (GHG) emissions. A recently released study by the Congressional Budget Office examines current spending on the efforts and presents an analysis of recent trends.

According to the CBO study appropriations for work related to climate change totaled about $99 billion (in 2009 dollars) in the 1998-2009 period. It noted that, "For most of that period, federal resources devoted to examining and mitigating climate change grew slowly and unevenly when adjusted for inflation." A summary of the study on the CBO Director's blog noted that, "During that period, the nation's commitment to climate-related technology development increased significantly, as has the forgone revenue attributable to tax preferences. Funding for climate science and international assistance, by contrast, stayed roughly constant."

More than a third of the total amount, $35.7 billion, was provided in the American Recovery and Reinvestment Act of 2009, which may present a spending challenge. Under ARRA, federal agencies have a September 30, 2010 deadline for issuing contracts, ordering goods and services or otherwise committing the funds. Questions have been raised about whether state and federal agencies will be able to meet the deadline and maintain program quality. States are particularly under pressure due to budget reductions, personnel shortages and the burden of complying with various federal regulations.

The study noted that among of the rationales for federal support for climate science and technology research and development is the fact that the prices paid for fossil fuels and carbon emissions do not fully reflect the environmental impact of the cost to society. In conjunction with that is a belief that scientific research and technical innovations conducted by the private sector would be funded at a lower level and probably would not capture all the potential societal benefits. The CBO also posited that some of the justification for the climate change spending "can be viewed as compensating for the lower energy prices."

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