"Production tax credits would stimulate economy"
Two weeks ago, Senate Finance Committee Chairman Max Baucus (D-MT) announced that he would attempt to pass an economic stimulus package independent from the House package. Last week, he pulled one together which proposed to extend the renewable energy production tax credit (PTC) for renewable energy. (Good move, Chairman.)
But for political reasons, the PTC extension is under serious threat despite the fact that in a slowing economy, renewable energy is a growing sector that, with the right steps, promises to create jobs and market growth.
Over the last week the American Wind Energy Association (AWEA) has released a series of statements explaining that if the PTC lapses, 75,000 wind-related jobs will be at-risk. Monday, the AWEA and the Solar Energy Industries Association (both trade groups) released a study showing that combined, 116,000 jobs and $19 billion in investment will be lost if the PTC lapses.
So why is this package being opposed?
Since Baucus’ proposal does not mirror what Speaker Pelosi and the Bush administration agreed upon (it’s larger), Republican Senators are lining up against it simply along party lines and without considering the substance. They plan on arguing that a PTC extension is not a stimulant, but they’re misled (see above stats). (It’s also worth noting that the PTC provision was taken out of the energy bill as part of the deal to remove the tax and subsidy breaks the oil companies were losing, not because of the PTC itself. Unfortunately, its removal was overlooked and since neglected.)
Whenever the production tax credit has been allowed to expire, investment and the related industries have suffered (see chart). At this point in time – given our economic and energy dilemmas – refusing to extend the PTC jeopardizes a crucial sector of the economy otherwise on the rise. As Senators consider the package, hopefully any debate over the bill can prove this provision an economic stimulant.
– Kari M.