Some good things did happen in the last-minute fiscal deal last week. While it does little to address the upward redistribution of wealth or the national debt fiasco, at least it is a half-step in the correct general direction.
More importantly, some goodies were snuck into the deal: An extension of unemployment benefits, tax cuts for the masses, a closing of loopholes, and even some good news on the environmental front. Included with the deal was a one year extension of the wind energy Production Tax Credit (PTC), as well as investment tax credits for community and offshore projects, a credit for cellulosic ethanol producers, and a biodiesel tax incentive. These common-sense policies are extensions of already existing ones. This is all in line with Obama’s stated agenda for his second term.
Prior to the deal, wind farm developers were in a mad dash to beat the fiscal cliff deadline, putting hundreds of windmills into operation in November and December 2012. Under the PTC, wind turbines connected to the power grid receive a 2.2-cent per kilowatt-hour tax credit for their first ten years of operation. This could amount to as much as $1 million per wind turbine.
This policy extension is expected to save 37,000 jobs. What is controversial about this?
We all know the argument: “If green technology X were so great/profitable, then why should it be subsidized?”
I’ll let John Hickey, director of the Missouri Chapter of the Sierra Club, explain:
"The federal government subsidizes coal and oil. Those subsidies don't have sunsets; they don't have one-year sunsets or two-year sunsets so that they're debated frequently. They are permanent."
Which technology is the real drain on our economy?
In addition to subsidies, the health costs incurred from fossil-fuel combustion and the long-term costs of climate change will dwarf the costs of PTC and the other "green" bits of the cliff deal.
Such policies should be made permanent. The U.S. should remain a world leader in green energy, technology, and jobs. If spending is the primary concern, cuts to oil, coal, and gas subsidies are the fiscally responsible option.
Unfortunately, Congress is in the pocket of the fossil fuel industry. Like the deadlock in Congress, the problem is obvious, but no one is willing to fix it.