"You should anticipate no changes in our climate proposals," Office of Management and Budget chief Peter Orszag told reporters, despite reported hints that President Barack Obama might now compromise about the auctions.

US industrial concerns including utility companies have been pushing for the government to give away some of the permits, rather than charging for them in an auction, so as to ease the transition to cap-and-trade.

Congress is now debating that system, under which companies would buy rights to emit greenhouse gases from firms that use less energy and pollute less.

Obama argues that with the future of the planet at stake, the United States must now take the lead on global warming after years of denial under the former administration of George W. Bush.

Meanwhile the head of the Congressional Budget office told a Senate panel that cap-and-trade would adversely affect both consumers and producers at a time of national economic distress.

"Under a cap-and-trade program, consumers would ultimately bear most of the costs of emission reductions," said CBO director Douglas Elmendorf in testimony to the Senate Finance Committee.

"Higher prices for energy-intensive goods and services would lead to a variety of consequences for different industries, regions of the country, and income groups," he said.

Nevertheless, "policymakers can significantly affect the distribution of costs associated with a cap-and-trade program, depending on how they decide to distribute the value of the allowance," he said.

The non-partisan CBO, which provides federal economic and budgetary analysis to Congress, estimated that a 15 percent reduction in carbon emissions would cost the average US household roughly 1,600 dollars.

The Democratic-led bill in Congress aims to cut US carbon emissions by 20 percent from their 2005 levels by 2020, and dramatically boost reliance on renewable energy.

The Obama administration says it is committed to offsetting higher energy prices associated with cap-and-trade through subsidies and tax breaks, especially for lower-income people.

And a study on Wednesday from the independent Pew Center on Global Climate Change said that cap and trade would have only a modest impact on the competitiveness of energy-hungry US industries.

'Cap and trade' to hurt America in the wallet: analyst
A proposed US market to trade rights to emit greenhouse gases would adversely affect both consumers and producers at a time of national economic distress, according to testimony from an independent government agency Thursday.

"Under a cap-and-trade program, consumers would ultimately bear most of the costs of emission reductions," said Douglas Elmendorf, director of the Congressional Budget Office, in testimony to the Senate Finance Committee.

"Higher prices for energy-intensive goods and services would lead to a variety of consequences for different industries, regions of the country, and income groups," he said.

Nevertheless, the CBO director said, "policymakers can significantly affect the distribution of costs associated with a cap-and-trade program, depending on how they decide to distribute the value of the allowance."

The non-partisan CBO, which provides federal economic and budgetary analysis to Congress, estimated that a 15 percent reduction in carbon emissions would cost the average US household roughly 1,600 dollars.

The cap-and-trade system in which industries would buy rights to emit the gases from industries that use less energy has been championed by President Barack Obama, is contained in a bill now before Congress.

The Democratic-led bill aims to cut US carbon emissions by 20 percent from their 2005 levels by 2020, and dramatically boost reliance on renewable energy.

Obama argues that with the future of the planet at stake, the United States must now take the lead on global warming after years of denial under the former administration of George W. Bush.

His administration wants the bill approved by the end of the year, ahead of the president's planned trip to Copenhagen for a UN climate change conference in December.

The bill has more support in the House than in the Senate, where its goals face opposition not only from most Republicans but also from key Democrats from industrial states.

Meanwhile, a study on Wednesday from the independent Pew Center on Global Climate Change found that cap and trade would have only a modest impact on the competitiveness of energy-intensive US industries.

Manufacturing industries with high levels of energy use would lose an average 1.0 percent of their production to imports from countries where greenhouse gas emissions are not penalized, the report published by the Pew report said.

The estimate was based on an assumption that a ton of carbon dioxide, the main greenhouse gas contributing to global warming, would sell for 15 dollars.

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