These Go to 11: Important Clean Energy Provisions in the President’s Budget Proposal
President Barack Obama’s proposed budget for fiscal year 2013 sets a responsible course for rebuilding the economy so that it works for everyone, not just the privileged few. Our middle class is the engine of economic growth, but is threatened by dwindling public investments, a tax system increasingly rigged to benefit the wealthy, a fraying safety net, and assaults on what should be the bedrock guarantees of Medicare, Medicaid, and Social Security.
The president’s budget protects those guarantees, boosts critical investments, and takes steps toward rebalancing the tax code so that all pay their fair share. And it does this in a fiscally responsible way, charting a path that nurtures the economic recovery while reducing the federal deficit and without asking the middle class to shoulder a disproportionate share of the burden.
President Obama’s proposed 2013 budget invests in clean energy to help power the engine of economic growth. The budget would direct funds to efficiency and renewable electricity technologies to create jobs and boost domestic manufacturing, and would also make manufacturing more efficient. The cleaner energy that will result from these investments will reduce pollution and protect public health. In addition, the budget would make taxes fairer by eliminating $40 billion in unnecessary breaks for Big Oil companies, which made record profits in 2011.
This clean energy vision would benefit middle-class Americans and the rest of the 99 percent. It is a stark contrast to the “drill, baby, drill” policies promoted by the American Petroleum Institute and other Big Oil allies.
Here are 11 important clean energy provisions in the president’s proposed 2013 budget:
1. Extends the production tax credit for wind energy. Wind projects currently receive a tax credit of 2.2 cents per kilowatt hour of electricity. Thanks to this production tax credit, enough new wind energy was built in 2011 to power more than 2 million homes. The credit is set to expire, however, at the end of this year. Without an extension, 37,000 jobs could be lost. The budget would extend the production tax credit through 2013.
2. Extends the Treasury Cash Grant Program (Section 1603 of the American Recovery and Reinvestment Act) to assist small renewable companies. This program provided grants in lieu of tax credits to small renewable companies that were unable to utilize the credits, but it expired at the end of 2011. Extending it for one year would create 37,000 jobs in the solar industry alone. The budget would extend the credit for one year and then convert the program into a refundable tax credit through 2016.
3. Increases R&D funding for advanced energy technologies. The Advanced Research Projects Agency-Energy, or ARPA-E, would receive $350 million for investments in potentially game-changing energy technologies. The Department of Energy reports that “11 projects that received $40 million from ARPA-E over the last two years have attracted more than $200 million in private capital following successful research breakthroughs.”
This funding would also boost domestic manufacturing, as investments in innovative R&D would lead to the development of clean-tech products that can be made in the United States.
4. Invests in clean domestic manufacturing. The Advanced Manufacturing Partnership helps domestic manufacturers become more competitive and create jobs by reducing energy use and saving money. The budget would provide $290 million for R&D for more efficient industrial processes and materials.
The budget would also provide $5 billion for the “48C” clean energy manufacturing tax credit for companies that manufacture clean-tech products, including energy efficiency equipment, renewable energy equipment, and “a wide range of clean energy products.” The original $2.3 billion program that was oversubscribed in 2009 leveraged $2 of private investment for $1 of tax credit, and created 58,000 jobs.
5. Invests in solar and wind energy. The Department of Energy budget provides $310 million for the SunShot Initiative, designed to make solar electricity cost-competitive with dirtier fossil fuel energy without subsidies by 2020. It also includes $95 million for wind energy, including offshore wind technologies.
The Department of the Interior budget expands the program to review and issue permits for renewable energy projects on public lands to meet the president’s goal of 11,000 gigawatts by the end of 2013. This is enough to power an estimated 2.5 million homes.
6. Invests in energy efficiency. Using less energy is an effective way to lower electricity bills and cut pollution. In addition to helping manufacturers save, the budget would also target buildings for energy savings. The Washington Post reports that the “proposed budget includes an 80 percent increase in money to promote energy efficiency in commercial buildings and industries.”
As part of this effort, the budget increases the DOE Building Technologies Program by 40 percent to “[s]upport accelerated research and development for innovative building efficiency technologies and the continued introduction of consensus-driven appliance efficiency standards.”
The budget also anticipates congressional enactment of the Home Star program to help owners retrofit their houses to become more energy efficient and lower their energy bills.
7. Increases funds for environmental enforcement. Environmental enforcement is a key element to ensure compliance with safeguards to reduce mercury, lead, smog, acid rain, and other toxic pollutants. But the fewer green cops on the beat, the less likely it is that some firms will comply with pollution reduction requirements.
The proposed 2013 Environmental Protection Agency budget includes increased funding for “[c]ore priorities, such as the agency’s operating budget which includes funds for the enforcement of environmental and public health protections.” States would receive 10 percent more funds for implementation and enforcement of federal environmental safeguards.
The Department of the Interior budget also includes $222 million for its new Bureau of Safety and Environmental Enforcement. This includes 13 percent more money, and would pay for oil spill response planning and safety inspections, and enforcement and investigations to prevent another oil disaster like the BP Deepwater Horizon blowout.
8. Reduces global warming pollution and impacts. The administration plans to undertake a number of actions to “reduce GHG [greenhouse gases] before it is too late.” This includes implementing its second round of fuel economy and carbon dioxide pollution standards for cars and light trucks, which will reduce fuel use by 12 million barrels of oil and cut carbon dioxide pollution by 6 billion metric tons from cars built through 2025. In addition, the EPA plans to “continue to develop regulatory strategies to control GHG emissions from major stationary sources.”
The budget also includes a 6 percent increase in funds to build on our base of scientific knowledge about global warming and “accurately project climate change and its impacts.”
Finally, there is a modest increase in funds to help public lands managers measure climate change impacts and adopt appropriate management practices.
9. Invests in energy and money savings by the military. The Department of Defense “consumes almost three-fourths of all Federal energy resources.” The proposed budget would double spending on clean energy compared to 2012 by investing $1 billion in clean energy, including efficiency retrofits for buildings and meeting efficiency standards for new facilities.
The National Journal reports other investments include:
[Replacement of] traditional jet fuel with biofuels, supply troops on the front lines with solar-powered electronic equipment, build hybrid engine tanks and aircraft carriers, and increase renewable energy use on military bases.
Although some conservatives have attacked clean energy investments in the private sector, some leaders support these military clean energy investments. Rep. Jack Kingston (R-GA), a member of the House Defense Appropriations Subcommittee, noted “that it [clean energy investments] has grown as a culture and a practice and it’s a good thing.”
10. Maintains funding for international climate finance. The budget includes at least $833 million for international climate investments to support sustainable landscapes, clean energy, and adaptation to climate change in developing countries. The funds, consistent with last year’s spending, invest in programs at the State Department, the Treasury Department, and the U.S. Agency for International Development.
These investments demonstrate ongoing U.S. commitment to international climate involvement beyond the U.S. pledge for fast start financing for adaptation and mitigation in developing countries. The administration understands these additional investments are critical to curb dangerous climate pollution, enhance national security, create American jobs, and secure leadership abroad.
11. Cuts oil-and-gas tax breaks by $40 billion over a decade. The 2013 budget would make taxes fairer by eliminating $40 billion in tax breaks over 10 years for oil-and-gas companies. And about one-fourth of the savings would be invested in domestic manufacturing, which would create jobs. The five largest oil companies made a record $137 billion in profits in 2011, so they don’t need $4 billion in annual tax breaks. (see “President Obama’s Oil Change: Cut Tax Breaks, Invest in Jobs”)
Some of these proposals are familiar because the president proposed them in previous budgets. Although House Republican leaders have previously rejected them to benefit their Big Oil and coal allies, these proposals remain good ideas that would benefit the middle class and the entire 99 percent.
Unfortunately, public support for these proposals has not been enough to overcome special interest opposition, aiding the 1 percent who profit from the energy status quo—high oil and gasoline prices, toxic air pollution, and record profits for oil companies. President Obama’s budget, instead, would propel us along a clean energy path with more jobs, less pollution, and fairer taxes.
Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at the Center for American Progress.
Thanks to Kiley Kroh, Associate Director for Ocean Communications; Richard Caperton, Director of Clean Energy Investment; and Rebecca Lefton, Policy Analyst, all at the Center for American Progress.
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Daniel J. Weiss