The US administration is proposing a $4 billion fund to reward states that exceed cuts in greenhouse-gas emissions and to compensate communitities affected by the reduction in coal demand

The US administration is proposing a $4 billion fund to reward states that exceed cuts in greenhouse-gas emissions and to compensate communitities affected by the reduction in coal demand. It also proposes higher royalty rates for oil, gas and coal extraction on public land.
The measures appear in president Barack Obama’s 2016 budget and are likely to be greeted unenthusiastically by the Republican majority in Congress. The budget also calls for permanent tax breaks for wind and solar, investment in eastern US Appalachian communities facing a steep drop in coal-industry employment, and $2 billion in tax credit incentives for coal plants that capture and bury their carbon emissions.
"The United States is undergoing a rapid energy transformation, particularly in the power sector," the White House said in a fact sheet on its energy spending. But that is also hurting "workers and communities who have relied on the coal industry as a source of good jobs and economic prosperity, particularly in Appalachia."
Obama has stepped up efforts to combat climate change since his 2012 re-election, with the Environmental Protection Agency moving ahead with the first caps on carbon emissions from power plants. Those rules, set to be finalised this year, have attracted stiff opposition from Republicans such as Senate majority leader Mitch McConnell, who say one of their top priorities is blocking those plans.
President Obama called separately for $239 million to push forward the EPA’s climate plans, including $25 million to help states write plans to meet the standards. In addition, the administration proposed a $4 billion fund to induce states to move more quickly or cut more steeply than required under the EPA plan.
The Treasury budget also proposes to make permanent an investment tax credit for solar, wind and fuel cells, and to establish a new $2 billion tax credit for power plants that capture their carbon dioxide, with a bonus $50 credit for every metric ton of carbon dioxide permanently stored underground.