Fund the Solution, Not the Problem

This week a couple of Members of Congress have thrown their ideas on budget cutting into the mix by proposing legislation to end all subsidies to fossil fuel industries.  Led by Congressman Keith Ellison (MN) and Senator Bernie Sanders (VT), the End Polluter Welfare Act aims to end over $110 billion in federal government spending to supporting oil, coal, and other fossil fuel industries over the next 10 years.

Source: DBL Investors, 2011 Report (pdf)
On its face, this bill is about highlighting wasteful government spending that has plagued Washington for decades and props up industries that no longer need government handouts.

But, there is also a story about the continued imbalance in our system that favors the old, polluting technology of the past over the clean energy choices of today and the future.

This imbalance is more than a graph with numbers.

This imbalance has real-world consequences that have already led to economic opportunity loss to other countries.

The most tangible example is the recent news that Gamesa, a giant in the wind industry, announced they would be installing an offshore wind prototype in the Spanish Canary Islands, rather than off the shores of Virginia.

From the Richmond-Times Dispatch:  Wind giant snubs Va. for offshore prototype

Global wind giant Gamesa said today it will build a wind turbine prototype in the Spanish Canary Islands instead of Virginia, citing the sluggish pace of U.S. development of offshore winds.

The Spanish company won Virginia regulatory approval in March to construct the 479-foot, 5-megawatt wind turbine prototype off the Eastern Shore. It was viewed as a significant step by the wind technology company to help develop the nascent U.S. wind industry, especially in waters off Virginia.


[A] Gamesa spokeswoman said the slow pace of regulatory actions, uncertainty over the future of tax credits for offshore development and the lack of a federal energy policy all conspired against investment in the prototype. (link added)

How Congress can act to fund the solution, not the problem

The signs of climate change, fueled by our continued reliance on carbon-polluting energy, are increasing in urgency. The economic, ecological and even psychological damages are being felt across the country.

While there is little sign that Congress will take significant action this year to significantly change the tide on energy policy, there is opportunity for policymakers in Washington to take important steps to keep current clean energy incentives going while looking at options to cut wasteful, environmentally harmful spending.

Clean Energy Tax Credits that Require Action in 2012

Unlike fossil fuel subsidies that are embedded in the tax code, these clean energy incentives need to be re-authorized from time-to-time and many have recently expired or are set to expire by the end of the year if Congress doesn’t take action.

  • Section 48 Investment Tax Credit (ITC) for Offshore Wind Energy. Offshore wind energy represents a huge untapped resource that stands to generate clean electricity and increase manufacturing jobs for the future of the nation. There are still, however, no operating offshore wind facilities in U.S. waters. Section 48 should be extended for offshore wind facilities and bi-partisan legislation has been introduced in the House and Senate to do so.
  • Section 45 Renewable Energy Production Tax Credit (PTC) . This provision has been a critical tool to support investments in renewable energy. The credit expires at the end of 2012, but uncertainty on whether Congress will act has already resulted in a sharp drop in investments in wind energy production, threatening the livelihoods of the more than 78,000 people in nearly every state in the nation who are now in wind-supported jobs. When Congress allowed the PTC to expire in the past, wind installations dropped between 73 and 93 percent.
  • Tax Credits for Energy Efficient Homes & Appliances.  The Section 45L Efficient New Homes Tax Credit & Section 45M Efficient Appliances Manufacturer Tax Credit expired at the end of 2011.  These tax credits not only save consumers and homeowners money by promoting energy efficient appliances and home energy products, but also create jobs. These credits encourage domestic manufacturing of high-efficiency appliances and jobs installing home efficiency projects that cannot be exported.
  • Section 48C Advanced Energy Manufacturing Tax Credit. This program leveraged vital private investments in new, expanded, or re-equipped clean energy manufacturing projects throughout the country. With applicants far exceeding the program’s original allocation, the program was able to leverage $5.4 billion in private investment, boosting growth and creating thousands of new U.S. manufacturing jobs for the burgeoning global renewable energy industry. Congress must pass an additional allocation for 48C, so that we can continue to grow our domestic renewable energy industry from the beginning to the end of the supply chain.
  • Section 1603 Treasury Grant Program for Renewable Energy Projects.  Section 1603 has played a vital role in renewable energy deployment and expired at the end of last year. The program has leveraged over $22.8 billion in private sector investment to support over 2,000 projects representing over a dozen clean energy industries in all 50 states. According to a study by the U.S. Partnership for Renewable Energy Finance (a non-partisan educational program for policymakers), the Section 1603 program has generated over 115,000 jobs since it was enacted.
  • Section 30B(d)(2)(B) Credits for Hybrid Medium- and Heavy-Duty Trucks.  Medium and heavy duty vehicles are second only to automobiles in oil consumption and they are responsible for 20 percent of U.S. transportation-based greenhouse gas emissions.  Hybrid and electric drives can increase fuel efficiency in trucks from 20 to more than 50 percent, yet the incentives for producing and deploying them expired in 2009. These incentives will help accelerate the development and deployment of more efficient and cleaner vehicles and help create domestic jobs.

Learn more about NWF’s efforts to promote clean energy that protects wildlife for our children’s future and what you can do to help.