To Reduce Pollution - Congress Must Support Clean Energy

UPDATE (7/21/15): The Senate Finance Committee voted 23-3 to pass the bill as offered. While many of the 100+ amendments were discussed, all were ultimately withdrawn. We expect most of these amendments to resurface when the bill advances to the Senate floor.

The Senate Finance Committee today will consider a much-needed bill to renew and extend critical tax incentives for clean energy that expired at the end of 2014. Some of these incentives are aimed at business and industry, while others will help homeowners. They range from tax credits for producing wind power to credits for upgrading a building's energy efficiency with products like windows, insulation and advancement energy management software. It is essential that action is taken now to deliver the many economic and health benefits these credits provide, but it would be preferable for Congress to pass a longer- term extension and update them to reflect current technology. NRDC is very supportive of using the tax code--through credits or deductions--to incentivize clean energy technologies because spreading renewable energy and energy efficiency across the country benefits all Americans in the form of reduced pollution.

Offsetting highly polluting power plants like coal or oil with clean, renewable energy production and cutting demand through smarter energy use yields health benefits in the billions of dollars. Yet these developing technologies are competing against incumbent polluting fuel sources, who've already received decades of government support, for market access. In order to reduce pollution we need clean energy to fully develop and to accelerate deployment which means we need incentives providing long-term market signals and stability. Congress has repeatedly allowed these clean energy credits to expire (for example, waiting until almost the end of last year to renew them for 2014), which leads to uncertain market conditions. These fits and starts in policies affecting clean energy unnecessarly discourages new investments and increases the cost of capital for clean energy developers.

That is why NRDC joined with dozens of other groups representing businesses and environmental interests to urge the Senate Finance Committee to renew and extend these important provisions that expired on December 31 and we are very pleased they are included in the draft being considered. (37 Business and environmental groups call on Finance Committee to extend clean energy tax credits.pdf)

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(Source: AWEA website)

Unfortunate opposition

Unfortunately, there are some in the Senate who don't believe these incentives are worth continuing. Sens. Jeff Flake (R-AZ) and Joe Manchin (D-WV) and six of their colleagues signed a letter opposing the extension of the Production Tax Credit (PTC) for wind, claiming that the cost was too great and the market no longer needs incentives. We disagree strongly with this argument. The PTC and other clean energy tax incentives have successfully helped bend the cost curve of renewable energy and efficiency technologies to grid parity in some markets, but there is still progress to be made in regions across the country if all Americans are to have access to affordable renewable energy. The only energy tax incentives that need to be repealed are the billions in ongoing subsidies to the fully developed, mature and polluting fossil fuel industries.

Amendments for polluters

Over 100 amendments had already been filed before today's markup even began. Some attempted to weaken or block the renewal of clean energy tax incentives and should be opposed. These amendments, which serve to advance the big polluter agenda, include several from GOP Sen. Pat Toomey of Pennsylvania designed to block the PTC for wind and repeal incentives for electric and fuel cell vehicles.

Amendments to Improve

In contrast, many other amendments would help advance clean energy development and deployment and should be supported. Several embrace NRDC recommendations to improve the incentives for energy efficiency by updating them to reflect recent technology.

Unless the big polluter amendments offered by Sen. Toomey and others succeed, this bill will represent an important step forward by Congress in recognizing the importance of clean energy tax incentives and providing the longer-term market signal developers and utilities need to further develop these important resources. We cannot address some of the most pressing environmental challenges--climate change and air pollution--without fully developing clean energy. These technologies are worthy of public investment and we hope that the committee's action will spur further work by Congress shortly.

About the Authors

Marc Boom

Director of Federal Affairs, Government Affairs

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