by Brad Johnson

“If our country goes over the fiscal cliff, we will be able to climb back up. But if our planet goes over the climate cliff, we will plunge into an abyss of impacts that we cannot reverse.”

With these words, Rep. Ed Markey (D-MA) exposed the essential absurdity of the “fiscal cliff” debate in a Washington, DC address last week. Over 10,000 Americans have spoken out in agreement, calling on Washington to turn to the looming climate cliff.

The leaders of the “fiscal cliff” debate claim their stances are based on their sober-minded obligations to our children and grandchildren, even as they shirk their true responsibility to confront the fossil fuel industry, whose rogue behavior threatens the very existence of future generations.

During his debates with Mitt Romney, President Barack Obama argued that “reducing the deficit” is a “moral obligation to the next generation.” House Speaker John Boehner told the National Religious Broadcasters that “leaving our debt on its unsustainable and immoral path” will “truly cause pain and suffering.”

Some leaders in Washington are speaking out against the absurdity of climate silence during the fiscal debate. Watch Markey’s remarks:

In a Senate floor speech last week, Senate Budget Committee member Sheldon Whitehouse (D-RI) juxtaposed the moral rhetoric of his Republican colleagues around the stimulus, health care, and the debt with their continued refusal to even acknowledge climate change:

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The Environmental Protection Agency today finalized tighter public health protections from soot pollution, an important action that will save lives.

Carol M. Browner, a Distinguished Senior Fellow at the Center for American Progress and a former agency administrator (from 1993 to 2001), released the following statement on the agency’s action:

The Environmental Protection Agency’s air pollution standards are based on the best available science and updates to existing standards based on the new scientific evidence required under the law. We already know soot is a deadly air pollutant that takes tens of thousands of lives every year, increases the rates of heart attacks and lung disease, and exacerbates asthma attacks. And we also know that reducing the levels of soot pollution in the air can reduce these risks. The agency’s updated soot pollution protections will save lives and improve public health.

Opponents of strengthening this important public health standard say it’s not necessary. We’ve heard that before. As with the Environmental Protection Agency’s public health protections against lead in gasoline, acid rain, airborne toxic chemicals, and other pollutants, the industry predicted negative economic impacts. In reality, though, American innovation found a way to meet the standards while contributing new technology and jobs to the economy. We don’t have to choose between a healthy economy and healthy air and lungs. We can have both.

The agency has taken significant steps over the past four years to clean up our air, with new clean car and fuel efficiency standards, new protections against mercury pollution, and now stronger standards to protect us against soot pollution. The Obama administration should be commended for this work and encouraged to continue to fight for cleaner air with protections against carbon pollution from power plants.

As the agency administrator, Browner in 1997 led the charge to tighter the Clean Air Act’s National Ambient Air Quality Standards on acceptable levels of smog and the fine airborne particulate matter that makes up soot. She successfully convinced the Clinton administration to support these stricter air pollution protections and persuaded Congress to accept them. At the time, Browner argued that new air pollution protections against soot and smog “will provide new health protections to 125 million Americans, including 35 million children.” The U.S. Supreme Court unanimously upheld the soot and smog protections against legal challenges.

by Richard W. Caperton

“How much is the production tax credit for wind worth?”  That sounds like an easy question to answer: 2.2 cents per kilowatt-hour.

The truth, however, is that the PTC is worth different things to different people, and that the 2.2 cents per kwh is just the amount that it costs taxpayers.  For wind turbine owners, the credit is sometimes worth far less than 2.2 cents.  This isn’t just true with wind.  Other renewable energy technologies have access to similar tax incentives, and also find that they are sometimes worth less to project developers than the cost to taxpayers.  To get the most bang for the buck (or, the most renewable energy for the taxpayers’ dollars), Congress should work to make sure renewable energy tax incentives are delivering value efficiently to wind project developers and owners.

As CAP has previously written, supporting renewable energy through the tax code has been beneficial for clean energy companies and for taxpayers.  The production tax credit for wind, for example, has been a tremendous success in building a thriving wind industry in the United States.  Senator Chuck Grassley (R-IA) recently said:

I’ve championed the wind energy tax credit as a way to provide a level playing field for a very clean, renewable resource. As a result, wind energy has become more efficient and cost-effective. The cost of wind energy has declined by 90% since the 1980’s. Wind has accounted for 35% of all new American electric generation in the last five years… As a result of the tax incentive, the wind energy has actually created new manufacturing jobs in the United States. Today 60% of the wind turbines’ value is now produced in the United States, compared with just 25% six years ago. There are now 400 facilities building wind components in 43 states. That is why a bill in the House of Representatives to extend the wind energy production tax credit has 80 cosponsors, including 18 Republicans.

At the same time, there is reason to believe that we could have even more wind power – and all the benefits that entails – if the PTC were fully optimized.  The issue is that not every wind project owner can use the tax credit.  The credit simply reduces the amount of taxes a company owes.  For many wind projects, the owners don’t actually owe taxes because they’ve just invested large amounts of money.  In other cases, a company may owe taxes, but not as much as the credit is worth.  As an illustration, if a company owes $1 in taxes but has a $2 credit, they can only use $1 worth of the credit.

Today, companies deal with this problem by bringing in a so-called “tax equity investor”.  The exact structure of these transactions is complex, because you’re not technically allowed to “sell” tax credits, but the gist of the transaction is that the tax equity owners pay to use the tax credits.  Of course, they buy the credits at a discount, in order to turn a profit on the deal.  That is, they may only pay 75 cents for a one dollar credit.

This discount is critical.  A middle-man has now entered the equation, and has reduced the value of the credit to the wind project developer, even though it still costs the taxpayers 2.2 cents per kwh.

Congress could address this issue by making minor changes to the PTC so that the discount the middle-man demands would be smaller.  One way to do this would be to make the rules for “tax equity” easier, so that more companies would want to participate in the tax equity market.  The problem with this is that it may have a negative side effect of increasing the use of money-losing ventures as tax shelters.  Fortunately, there’s another option: Decrease the uncertainty around whether or not a project will qualify for a tax credit.

Here is the key point: As the law is now written, a project is only eligible for a tax credit if it is “placed in service” by a certain date.  For wind projects, that date is December 31, 2012.  This means that a wind project will only qualify for the PTC if it begins generating and selling electricity by December 31.  This is the end of a very lengthy permitting, procurement, and construction process, any step of which can take longer than expected, and none of which can move forward without all of the financing in place.  This means that tax equity investors are expected to commit money to a project and allow much of that money to be spent, even though there is some risk that construction may not finish in time and the project may not be “placed in service” by the deadline.  Tax equity investors are aware of this risk, and account for it when figuring out how much they should discount the PTC when pricing the transaction.

This situation could be avoided if the law was changed so that a project is eligible for a tax credit if construction begins by a certain date.  Under this “commence construction” structure, there is no longer any risk that construction delays will make the project ineligible for the tax credit, which reduces the risk for tax equity investors.  This change has no effect on taxpayers, because under either structure the project can only claim the credit for electricity generated.

There’s another benefit to making this rule change.

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by Peter Lehner, via NRDC’s Switchboard

The average American idles his or her engine about 16 minutes a day. That means we burn about 10.6 billion gallons of gas each year–nearly a month’s supply–to go absolutely nowhere. That gas is wasted.

According to the automotive experts at Edmunds.com, “You can make a Corolla get the same gas mileage as an 18-wheeler by sitting in the car with the air-conditioner running while waiting in an elementary-school pickup line.”

Experts concur that if you’re waiting for more than 30 seconds, you’ll save gas by stopping and restarting your engine. You’ll keep the air cleaner, too. Some cities and states even have anti-idling laws to prevent air pollution. When I was at the New York Attorney General’s Office, we brought a series of anti-idling cases that resulted in mandatory driver training for most of the public school bus fleet, protecting kids from breathing in polluted air outside schools.

However, a recent survey from Vanderbilt University shows that many people are unaware that most engine idling is unnecessary, wasteful, or even dangerous. We have our own calculus as to when to cut the engine–depending on how hot or cold it is, how long the line is, or who we’re waiting for. What we don’t think about is how much gas we’re wasting.

An improved engine technology, already widespread in Europe, takes the guesswork out of when to stop idling–and will save drivers hundreds of dollars each year in gas costs. It’s also helping drive job growth in the Midwest, the heart of the automotive manufacturing industry.

Stop-start technology automatically shuts off your engine when your car is stopped, but leaves your radio, air conditioning, and other electronics running off the battery. When you release the brakes or engage the clutch, the engine seamlessly restarts. The technology can boost fuel efficiency by 5 to 10 percent.

This feature has actually been around since the 1980s, but improved batteries, such as absorbent glass mat, or AGM batteries, have made the system a lot smoother. Reviewers test driving the 2013 Ford Fusion say “you barely feel the transition” (Autoweek), and that the technology is “smoother than that of the 3 series BMW” (Road and Track).

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by Justin Guay and Nicole Ghio, via the Sierra Club

Continuing its efforts under Chairman Fred Hochberg to direct as much U.S. taxpayer money as possible to dirty climate destroying coal projects with devastating social and environmental impacts, the U.S. Export-Import Bank (Exim) Board of Directors discussed financing the controversial Oyu Tolgoi gold and copper mine in Mongolia at its meeting last week.

This is the very same project the World Bank Group is already under heavy criticism for considering.

But wait, you say, that doesn’t sound like a coal plant…

That’s what the World Bank, and Ex-Im Bank, would like you to believe. But tucked into the investor agreement is a requirement to construct a new 750 MW coal-fired plant to power the mine after four years. But since the coal plant is an “associated facility,” the World Bank didn’t bother to follow its coal policies. Instead it failed to convene an expert panel to screen the project because they might realize that low carbon alternatives exist. You know, like when the New York Times highlighted this very same project as ripe for wind development.

Civil society is rightfully quite angry at the World Bank. Not only for this blatant attempt to avoid the rules, but because the project is already facing a complaint from local herders whose access to clean water, livelihoods, and culture are endangered by the project.

Drought continued to expand through many key farming states within the central United States in the past week, as scattered rainfall failed to replenish parched soils, according to a report issued Thursday by state and federal climatology experts. [Reuters]

Congress isn’t planning to take action on climate change any time soon. But if the planet keeps warming, a number of states won’t be able to ignore the problem quite so easily. One good place to see this is in the Colorado River basin. [Washington Post]

American energy businesses accounted for 23 big deals this year. But not all of them were in drillers, natural gas, or oil. [Daily Beast]

In an interview with HuffPost Live Thursday, former U.S. Army Brigadier General Steven M. Anderson spoke out against the building of the Keystone XL pipeline, warning that “all Americans should be outraged” about the national security implications of the project.  [Huffington Post]

More than 100 physicians urged the Obama administration on Thursday not to approve the construction of liquefied natural gas export terminals until more is known about the health effects of hydraulic fracturing, the drilling process that has opened the way for a big increase in domestic gas production. [New York Times]

A visit to the grocery store is likely to make shoppers skeptical about news of falling inflation. The drought last summer in the nation’s breadbasket is starting to reflect in food costs even as falling prices at the pump are pushing down overall inflation. [Wall Street Journal]

Susan Rice, the embattled U.N. ambassador, abruptly withdrew from consideration to be the next secretary of state Thursday after a bitter, weekslong standoff with Republican senators who declared they would fight to defeat her nomination. [Associated Press]

Nearly 4 out of 5 Americans now think temperatures are rising and that global warming will be a serious problem for the United States if nothing is done about it, a new Associated Press-GfK poll finds. [Associated Press]

Conservative groups pressed lawmakers in a Wednesday letter to oppose all proposals to enact a carbon tax. [The Hill]