Budget Bullets: Energy

We Can Invest in Clean Energy Projects While Reducing the Deficit, Greenhouse Gas Emissions, and Our Reliance on Foreign Oil

SOURCE: AP/Rick Bowmer

Congress should extend the renewable energy production tax credit, which helps wind and other energy companies develop new projects that create tens of thousands of good-paying jobs.

By John Griffith | July 6, 2011

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America is falling behind in the clean energy race. We must invest now in these critical new technologies to restore our economic competitiveness and create new jobs. And we can do so while reducing the federal deficit by ending wasteful tax breaks and imposing new fees on carbon and fossil fuels.

We can save $46 billion over the next decade by ending wasteful tax subsidies to oil, gas, and coal companies

• The federal government hands out more than $4 billion a year in tax earmarks to oil, natural gas, and coal companies—with no observable benefit to taxpayers
• At a time of $90-plus barrels of crude oil, companies admit they don’t need taxpayer-funded incentives to produce oil.
• The G-20 countries have agreed to phase out fossil fuel subsidies.

We can protect our planet from global climate change and reduce the deficit by $300 billion by putting a price on carbon emissions and levying an oil-import fee

• A $20-per-metric-ton fee on greenhouse gas emissions can generate about $1.2 trillion over the next 10 years, according to the Congressional Budget Office.
• Even if we rebate 75 percent of those revenues to low- and moderate-income families to offset any resulting rises in energy prices, we’ll still have $300 billion extra for deficit reduction.
• Creating $5-per-barrel fee on imported oil and associated products would generate about $20 billion more a year, according to analysis from the Center for American Progress.

We should double federal investments toward clean energy projects that promote innovation, create new jobs, and curb our reliance on foreign oil

• Congress can start by extending the renewable energy production tax credit, which helps wind and other energy companies develop new projects that create tens of thousands of good-paying jobs.
• Congress should also establish and fully fund a Clean Energy Deployment Administration, a government-run bank that lends money to get new clean-energy projects off the ground.
• Congress should appropriate at least $9 billion a year to the Department of Energy to fund research and development, and pass legislation that invests in electric grid improvements to carry renewable energy.

John Griffith is a Research Associate with the Center for American Progress.

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