Study backs House Democrats’ tax credit ambitions

Source: By Jeremy Dillon, E&E News reporter • Posted: Wednesday, December 4, 2019

As lawmakers seek agreement on a tax package before the end of the year, a report out this morning touts the climate benefits of legislation from House Democrats featuring a series of clean energy incentives.

The analysis from the nonpartisan Rhodium Group said a draft bill from Ways and Means Committee Democrats called the “Growing Renewable Energy and Efficiency Now (GREEN) Act” would help contribute to a drop of 100 million metric tons of greenhouse gas emissions by 2030 (Greenwire, Nov. 19).

That number would help reduce emissions to as low as 19% below 2005 levels in 2030, the report said, although that falls short of reductions promised under the Paris climate agreement.

Still, Rhodium pushes lawmakers to do more to meet the economywide reduction goals needed to avoid the worst climate change.

“We find that passing the GREEN Act will not close the gap, but any progress in reducing emissions is important in the face of the ongoing march of policy rollbacks by the executive branch,” the report said.

Chief among the bill’s policies, the report found the expansion and extension of the production and investment tax credits for wind and solar technologies could help deploy those renewable power sources by an additional 60 gigawatts compared with the current scenario.

Those additional gigawatts could help raise the generation share of non-hydro renewable technology to between 19% and 26% in that time frame. The current share hovers around 10%.

More wind and solar will be necessary to help backfill some of the nuclear power set to come offline in that same period, which the Rhodium Group estimated to shrink by 65%-75% over the next decade under current policy.

That same loss of nuclear power blunted some of the greenhouse gas reductions from the bill, the analysis said.

“At best,” said the report, “the zero-emitting generation share of total electric power stays roughly flat through 2030.”

Congress scheduled a phase-down of the wind and solar tax credits in the coming years following a 2015 deal. Pro-fossil fuel lawmakers agreed to extend the renewable incentives in exchange for lifting the crude oil export ban.

Although House Democrats have expressed interest in extending those credits once again, Senate Republicans remain hesitant.

The renewable incentives have helped undercut traditional power sources like coal and nuclear in the electric marketplace.

The Senate GOP has also remained timid about an extension for the electric vehicle tax credit. The “GREEN Act” has language to encourage the wider use of EVs.

Rhodium said that provision could encourage the sale of 3.4 million to 5.7 million more EVs between today and 2030.

That would equal 38% of all light-duty vehicle sales in 2030, it estimated, compared with just 3% in 2018.

Even so, the report called for more. “Turning over vehicle stock takes a long time, and despite record EV sales each year through 2030 under the GREEN Act, EVs still make up no more than 13% of light-duty vehicles on the road in that year,” the report said.