The U.S. renewable energy industry has directly created more than 40,000 jobs because of the Section 1603 cash grants, and can create 100,000 more if the program is extended. CAP’s Richard W. Caperton and Kate Gordon have the story.
Recent stories and campaign ads have challenged renewable energy tax credits:
Guest blogger Denise Bode, CEO of the American Wind Energy Alliance, responds.
Representing 85,000 people working in the American wind industry, we can say unequivocally that the Recovery Act’s 1603 tax credit has been one of the most effective public policies in existence for saving American jobs.
At a time when the recession threatened at least 40,000 American wind construction, manufacturing and other jobs, the 1603 tax credit program restarted stalled projects and saved all 40,000 jobs at risk. This year, a study by Lawrence Berkley National Laboratory (LBNL) found that the 1603 tax credit supported shovel-ready projects and over 50,000 American jobs. The 1603 program actually led to a record-breaking year of 10,000 megawatts (MW) of new wind in 2009, compared to the 4,000 MW feared prior to the Recovery Act.
Tax credits for renewable energy begin to level the playing field with oil, gas, coal, and nuclear energy. As a matter of fact fossil fuels have received permanent taxpayer money since 1920s, costing taxpayers well over $500 billion. Even in recent years, after maturing for a century, fossil energy still receives five times the subsidies as renewables, according to the Government Accountability Office. Even more, Americans pay for fossil fuel in the form of an additional $60 billion in health care costs, according to the Bush Administration report on hidden costs of energy.
We have a choice between a balanced energy plan that includes wind and renewable America energy or a plan that continues our increasing dependence on fossil fuels for our electricity, which is now over 60 percent. In the recession, project development and financing was difficult to obtain and costly. Many wind projects in mid-development could not complete financing. As a result, wind investment stalled with some projects stopping mid-construction; laying off construction workers and leaving wind towers and blades on the ground.
Every job saved was an American job. One hundred percent of projects that receive investment tax credits through 1603 are built in the United States, as required by the Recovery Act. The program also supports America’s growing manufacturing and supply chain industries. U.S. wind turbine domestic manufacturing has grown twelve-fold, with an increase in domestic content from 25 percent only a few years ago to over 50 percent now, and nearly 400 American manufacturing facilities making wind components. Contrary to recent campaign ads, data from the International Trade Commission (ITC) shows that less than five percent of the value of turbine parts used in the U.S. is imported from China.
The 1603 program continues and modifies the Production Tax Credit, which was first passed in 1992. In most respects the program operates exactly like all other tax credits in the tax code: all eligible projects receive the credit and it applies to all projects completed in a given year. However in one respect Congress tweaked the program to make the tax credit usable during a recession. Unlike the oil and gas industries which have other provisions called “Master-Limited Partnerships” (MLPs) to enable them to use tax credits, MLPs are not available to renewable energy industries. Instead, Congress provided for a reimbursement of the eligible tax credit, which made the program successful even in the deep recession.
The program is a more efficient use of taxpayer money because 100% of the incentive goes to the company making the investment and creating the jobs. Taxpayers get more jobs and clean energy per dollar spent. Many people have confused this program with discretionary government grants and recent news stories have suggested, for example, that the only projects that should receive the incentive are those begun after the Recovery Act was passed.
In this case, a key part of the program’s success was to complete many projects that had begun but were completely stalled, keeping Americans at work.
The 1603 tax credit program has been extremely effective at keeping Americans at work. Unfortunately, the program is set to expire at the end of 2010. Unlike oil, gas, coal, and nuclear industries who have permanent incentives, renewable energy industries will be stalled again unless Congress acts soon to extend the program into 2011 and 2012.
Last month, NASA reported it was the hottest January-August on record. That followed a terrific analysis, “July 2010 “” What Global Warming Looks Like,” which noted that 2010 is “likely” to be warmest year on record.
This month continues the trend of 2010 outpacing previous years, according to NASA:
Guest blogger Dominique Browning’s interview with Peter Goldmark is reposted from her EDF blog. I served as Goldmark’s special assistant when he was President of the Rockefeller Foundation two decades ago. He is one of the best thinkers and speakers on climate I know.
“What we need more than anything else is a mass movement of young people,” Peter Goldmark, director of EDF’s Climate and Air Program, who recently announced his retirement at the end of the year. “In American culture, it is youth that sets the agenda. It’s always been this way. Think who was driving change in the anti-Vietnam war movement, in the civil rights era. They have to mobilize, now, and demand action against global warming.”
Spanish wind giant signs big China deals
Spain’s Gamesa, one of the world’s top wind turbine groups, has announced three new contracts with Chinese firms as part of a surge in investments in the country to meet its rising demand for clean energy.
“I’ve never been to a tea-party event,” pollution billionaire David Koch told New York magazine in July, 2010. “No one representing the tea party has ever even approached me.” Koch’s corporate public relations officials declared in April 2010 that “no funding has been provided by Koch companies, the Koch foundations, Charles Koch or David Koch specifically to support the tea parties.”
However, in October, 2009, Koch was applauding his army of Astroturf tea party organizers. Brad Johnson has the story and the video that refutes Koch’s claim he isn’t the marionette.
Brad Johnson has the second in series examining the implications for climate and clean energy policy of the 2010 gubernatorial races.
Yesterday, the Wonk Room reviewed four gubernatorial races featuring anti-climate Republicans in the Midwest. Today, we look at five competitive state contests that pitch climate champions against global warming deniers with Tea Party backing, in Florida, Illinois, Minnesota, and Ohio. The future of renewable electricity standards, efficiency and clean technology support, and climate policy rest on these election results.
FLORIDA: Alex Sink (D) v. Rick Scott (R)
ILLINOIS: Pat Quinn (D) v. Bill Brady (R)
MINNESOTA: Mark Dayton (D), Tom Emmer (R), Tom Horner (I)
WISCONSIN: Tom Barrett (D) v. Scott Walker (R)
OHIO: Ted Strickland (D) v. John Kasich (R)
Study after study shows that AB 32, California’s landmark climate change law, will benefit the economy and help business. A new report from The Brattle Group shows that AB 32 and a Renewable Energy Standard will have a minimal effect on most businesses while fostering innovation and investment in clean tech industries that will ultimately create more jobs.
PRNewswire has the story:.
CAP’s Jake Caldwell, Director of Policy for Agriculture, Trade and Energy provides his insight into the EPA’s decision to increase ethanol mixtures in gasoline.
After eighteen months of review, the Environmental Protection Agency (EPA) announced today that it is willing to approve higher blends of ethanol in newer vehicles, but will conduct ongoing testing to assess whether such a boost in ethanol blends is appropriate for 2006 model or earlier cars and trucks.
Edited by Joe Romm, we cover climate science, solutions and politics. Columnist Tom Friedman calls us "the indispensable blog" and Time magazine named us one of the 25 "Best Blogs of 2010." Newcomers, start here.
Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga.
Joe Romm has pulled together the secrets of the greatest communicators in history to show how you can apply these tools to your writing, speaking, blogging — even your Tweeting.
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