Tax Credits for Efficient Cars, Home Fuel Cell Systems
President Clinton Calls for $6 Billion Global Warming R&D Program in State-of-Union Speech
WASHINGTON, DC - Saying that cleaning up the environment and economic growth can and must proceed as one, President Bill Clinton proposed a massive r&d program to address the global warming issue via advanced energy technologies in his annual State- of-the-Union address.
Coming near the end of his 75-minute, remarkably buoyant and eloquently upbeat talk to Congress in late January with not even a hint of the personal firestorm swirling around him, Clinton proposed spending $6 billion "in tax cuts and research and development to encourage innovation, renewable energy, fuel- efficient cars, energy efficient homes."
"Our overriding environmental challenge tonight is the worldwide problem of climate change, global warming, the gathering crisis that requires worldwide action," Clinton said in his speech frequently interrupted by, at times almost raucous, applause. "The vast majority of scientists have concluded unequivocally that if we don't reduce the emission of greenhouse gases, at some point in the next century we'll disrupt our climate and put our children and grandchildren at risk."
He added, "every time we have acted to heal our environment, pessimists have told us it would hurt the economy. Well, today our economy is the strongest in a generation, and our environment is the cleanest in a generation. We have always found a way to clean the environment and grow the economy at the same time. And when it comes to global warming, we'll do it again."
Union of Concerned Scientists Supports Proposals
Clinton's two-paragraph statement did not provide any specifics, which are expected to come in the administration's budget proposal due in early February. However, a preview of what's likely to be in the budget message was provided by a memo to White House correspondents and energy reporters from the Washington office of the Union of Concerned Scientists a few days before Clinton's speech, enthusiastically supporting these proposals.
Stressing that some of the numbers and details may change, the memo says the $6 billion, five-year proposal is expected to include an incremental budget request of about $500 million for climate technology research and development. Of this total, about $350 million would go to the Energy Department, about $120 million to the Environmental Protection Agency and the rest to other agencies.
Within DoE, most of that money, about $260 million, would go to the Office of Energy Efficiency and Renewable Energy (EERE) for a number of buildings, utility, transportation, and industrial sector programs, according to the Union. This would be roughly equal to a 30% increase over the FY '98 appropriated level of $914 million for these programs, according to the memo.
EERE is the home of DoE's hydrogen program.
As to tax incentives, the Union believes the White House has apparently decided to focus on incentives for commercializing a limited number of advanced energy efficiency and renewable energy technologies. Among them:
Tax Credits for Efficient Cars, Home Fuel Cell Systems
- Consumer tax credits of $3,000 for buying vehicles that are twice as efficient as the average for their size class, and $4,000 for the purchase of vehicles three times as efficient. The program is likely to start in 1999 and would run 5 and 12 years, respectively, according to the Union's information.
- Tax credits of as much as 20% for the purchase of fuel cell systems for buildings, high efficiency gas heat pumps, heat pump water heaters and other efficient building technologies.
- Tax incentives for new homes that use 50% or less of the energy required for homes built to the current model energy building code. - A 10% investment tax credit for high-efficiency cogeneration systems.
- A 15% tax credit for buying residential solar systems as part of the administration's Million Solar Roofs initiative.
- Extension of the existing production tax credit of 1.5 cents/kWh for electricity produced by wind and biomass generators (the current credit expires in 1999).
- Incentives for the production of ethanol from cellulosic biomass (as opposed to the current corn-based ethanol production system).
- Incentives for methane recovery by small landfills (those not covered by current EPA standards) and coalbed methane recovery.
Will Help Achieve Kyoto Goals
"This package is good for America," observed the Union's memo. "By encouraging the purchase of fuel-efficient vehicles, advanced building energy systems, and renewable electric generation technologies, the President's initiative will reduce local air pollution, create new jobs, and position U.S. companies to win their share of the booming international market for clean energy and transportation products.
"In addition, these initiatives will kick off a cost-effective strategy for achieving the commitments made by the U.S. at the recent global warming talks in Kyoto."
The memo notes that investment in just one megawatt of energy efficiency or renewable energy could create up to 10 more jobs than similar investment in fossil fuels. "Fuel cell vehicles, which conventional wisdom believed to be a decade or more from commercialization, have made such rapid progress that Mercedes- Benz, GM and Ford have announced the capability to produce these clean and efficient cars in large volumes by 2005," it added.
"This clean energy package outlined by the President deserves the support of every Senator and Representative as the budget process moves forward," it concluded. |
