Here’s President Obama, in his state of the union address on Tuesday, asking Congress to send him legislation that puts a cap on carbon emissions:

And his budget fleshes out exactly what sort of carbon cap he’s looking for:

Today, the White House will unveil a budget that assumes there will be revenue from an emissions trading system by 2012.

Sources familiar with the document said it would direct $15 billion of that revenue to clean-energy projects, $60 billion to tax credits for lower- and middle-income working families, and additional money to offsetting higher energy costs for families, small businesses and communities.

This, for me, is pure awesomeness with a cherry on top. The best news is that the Obama Administration clearly understands climate fairness:  the need for a sweeping climate policy that’s not only effective at curbing emissions, but also protects the poor and middle class from the effects of higher energy prices.

More details from the New York Times

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  • The budget will show the government beginning by 2012 to collect billions of dollars in revenues from selling permits to businesses that emit the polluting gases, assuming the president’s energy initiative becomes law as soon as this year, officials said.

    Because utilities and other businesses would presumably pass on their costs to customers, Mr. Obama will propose to use most of the government’s revenues from the permits to finance an extension of the new “Making Work Pay” tax credit beyond the two years covered in the $787 billion economic recovery plan that was just enacted.

    That tax relief, the administration will argue, will offset households’ higher costs for utilities and other products and services from businesses’ passing on their permit expenses.

    That tax credit annually will provide $400 to low-wage and middle-income workers or $800 to couples; Mr. Obama would like to increase those figures to $500 and $1,000. The credit phases out for those with incomes above $75,000 a year and for couples with incomes of more than $150,000; no benefit would go to individuals with more than $100,000 income and couples with $200,000.

    I don’t know enough about the details yet to be able to offer a critique—I’m sure there are details I could quibble with.  But in broad strokes, I sure do like what I see so far.