Despite the Supreme Court, here’s why the White House says we’ll cut carbon anyway

Source: By Steven Mufson and Chris Mooney, Washington Post • Posted: Wednesday, February 24, 2016

LAS VEGAS, NV – FEB. 16: A panel washing robot cleans a row of solar panels during a dedication ceremony to commemorate the completion of the 102-acre, 15-megawatt Solar Array II Generating Station at Nellis Air Force Base on February 16, 2016 in Las Vegas, Nevada. (Photo by Ethan Miller/Getty Images)

The Supreme Court stay on the Obama administration’s Clean Power Plan came as a shock to the White House. After all, the president had unveiled the plan in August 2015, calling it “the single most important step America has ever taken in the fight against global climate change.”

But on Monday administration officials took advantage of a new report to argue that the recent five-year extensions of wind and solar tax credits will cushion the blow and serve as a “bridge” to the Clean Power Plan.

Whether that is a bridge to nowhere depends on whether the Clean Power Plan survives the court system intact. That won’t be decided until spring of 2017 after an appeals court hears and decides, and the Supreme Court reviews, the case brought against the administration’s plan by a group of state governments and utilities.

For now, the extension — and eventual phase-out — of the production and earned income tax credits that were included in the year-end budget deal in December is a huge Christmas present for the wind and solar installations regardless of the Clean Power Plan’s fate.

“The surge in wind and solar capacity will provide a bridge to the Clean Power Plan,” said Dan Utech, deputy assistant to the president for energy and climate.

On Monday Utech pointed to a new report by the Energy Department’s National Renewable Energy Laboratory in Golden, Co., which says that the increase in renewable energy capacity driven by the tax credit extension would total 53 gigawatts through the year 2020. That total refers to installations that wouldn’t have happened without the extensions; total U.S. renewable additions will be greater than that overall.

That translates, says the analysis, into about an additional 500 million cumulative tons of carbon dioxide emissions averted in the electricity sector – taking a modest bite out of the 6.872 billion tons of carbon dioxide equivalents that the U.S. emits annually, as of 2014.

The nonpartisan Joint Committee on Taxation estimated that the extension of the solar tax credits will cost taxpayers $9.3 billion and that extending tax credits for wind power installations will cost $14.5 billion.

The NREL report has some important caveats. It said that the benefits of the credits would come largely over the next 14 years. By 2030, it said, assuming the Clean Power Plan goes into effect, there would be no significant difference in the level of solar and wind in place.

Moreover, low natural gas prices could undercut the subsidized wind and solar alternatives to some extent. The report said that low natural gas prices could reduce the extra renewable growth to 48 gigawatts by 2022, when the Clean Power Plan is supposed to take effect.

But the wind and solar industries are pleased. The budget deal extended the 30 percent solar investment tax credit for several more years – it will now begin to phase out in 2020. Meanwhile, the wind energy production tax credit was extended through the end of 2019, beginning to phase down by the close of 2016.

The renewable energy industries have long coveted the extensions, which they say will not only provide economic certainty for investors in solar and wind, but also lead to more deployment of these renewable energy sources than would have occurred otherwise.

Rhone Resch, president of the Solar Energy Industries Association, said “these tax credits are hugely important.”

Also hugely important, however, will be the outcome of the court challenge to the Clean Power Plan and the preferences of a new president.

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