Tax breaks for alternative energy brighten the future

No one in their right mind would stop administering an effective medicine to a sick child just because research was proceeding on a different cure. Yet, that’s essentially what Congress did when it let the nation’s suite of clean, renewable energy and energy efficiency tax incentives expire before leaving town for the holidays. 

Some might argue that these tax provisions have expired before and then been retroactively renewed while the clean energy sector continued to expand -- so no harm, no foul.  The facts, however, belie this sanguine perspective. 

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Just like an ill child needs medicine, we can’t afford to forego the proven benefits of clean energy tax credits for even a moment. Why?  Because our planet is sick.  Unregulated carbon pollution from burning fossil fuels is driving climate change. The science is in and the verdict cast. Unless our leaders take decisive, consistent action to dramatically reduce this pollution, climate disruption will impoverish our children’s future.  It will rob them of their natural heritage and impose unprecedented health risks as the atmosphere heats, causing even more extreme weather, disease, wildlife extinctions, and global insecurity.

Clean energy is key to staving off this nightmare scenario, but Congress has allowed the expiration of tax incentives that are critical to keeping America’s clean energy industries thriving. Faced with a climate crisis, it’s not enough to simply support continued growth in the clean energy sector.  We must maximize it. We need every wind farm, solar array, and energy efficiency solution possible to cut carbon pollution. What’s more, these investments create good domestic jobs and save the economy billions of dollars.

But over the last decade, congressionally imposed boom-and bust-cycles sparked by the uncertainty of whether vital tax credits will be renewed have driven the solar and wind industries into a series of harmful troughs, triggering job losses and stifling expansion. When it comes to cutting energy waste, retroactive tax credits have left many consumers and businesses out in the cold.

The latest excuse for this detrimental pattern is that tax reform is coming. Certainly a broad tax overhaul, if done right, could potentially improve energy savings and promote environmental progress. Chairman Baucus’ recent proposals represent a step in the right direction by acknowledging the energy tax code should reward performance based on how much pollution is reduced, instead of simply rewarding energy production. Such an evolution would upend a century of giveaways that continue to dole out tens of billions to Big Oil and Coal—the richest companies in history and the world’s major sources of dangerous carbon pollution.

Unfortunately, it’s anyone’s guess how soon we will turn the tax reform corner.  Congress accomplished little beyond posturing on that front in the past year. However, it did let clean energy incentives expire while allowing fossil fuel subsidies to continue. That is an important, but hard-to-swallow, fact.  No matter how much talk there is about tax reform, the bottom line is that one industry—the clean one—is going to suffer, while Big Oil gets to keep siphoning off taxpayer dollars no matter what. 

That injustice alone should provoke immediate action to renew the expired clean energy tax credits. But the larger motivation should be the moral obligation to protect our children from dangerous climate change.  

In short, Congress should immediately reinstate clean energy tax incentives while it continues to work on other, more far-reaching tax reform solutions. Doing so will keep our clean energy economy and its thousands of jobs healthy while producing millions in consumer savings and crucial reductions in the pollution poisoning our planet.

That’s the kind of effective medicine we need.

Matzner is associate director of government affairs for the Natural Resources Defense Council.

 

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