It's Time for Congress to Reform Clean Energy Tax Credits
By Senator Ron Wyden
The American people know the climate crisis is an existential threat and strongly support bold action. The climate disasters of the past year, whether it’s wildfires, cold snaps, or hurricanes, have underscored the urgent need to act.
In 2009 the Senate failed to advance comprehensive climate legislation. No Democrat thought that it would be another 12 years before we had another opportunity.
We have that opportunity now, and we can’t afford to squander it. Democrats’ Build Back Better Act is our last, best chance to prevent the most catastrophic effects of the climate crisis.
As currently drafted, the clean-energy package is projected to reduce carbon emissions in the power sector by 73 percent within the next decade.
The linchpin is permanent, technology-neutral tax incentives tied to carbon emissions reductions. These critical reforms were proposed in the Clean Energy for America Act years ago and have steadily gained support.
The bill ensures these vital incentives remain in place until we meet our climate goals—no more crafting energy policy a year or two at a time—and also includes robust incentives for clean transportation and energy efficiency.
In addition to tying incentives to emissions reductions, the bill includes a critical reform called “direct pay.”
This means providing tax credits directly to companies and cutting out big banks, making it much easier for new producers of clean energy to benefit.
By cutting out Wall Street middlemen, new projects will launch more quickly, and more underserved communities will benefit.
While this reform is critical to achieving the emissions reductions we need, it has the added bonus of being incredibly popular with the American people.
This feature is strongly supported by voters of all political stripes, with 74 percent supporting according to new Data for Progress polling. This includes 74 percent of Independents and 63 percent of Republicans, in addition to 82 percent of Democrats.
Lastly, the bill includes provisions to ensure the clean energy future is shared by all Americans by expanding access to affordable renewable electricity and clean vehicles, and bolstering clean energy investments in communities that depend on fossil fuels.
All told, this package is designed meet President Biden’s emissions goals, by driving electric vehicles to as much as 50 percent market share by 2030, reducing emissions from electricity by up to 73 percent, and putting us on a path to achieving net-zero emissions.
Senator Ron Wyden (@WydenPress) is a Democrat from Oregon and the Chair of the Senate Finance Committee.