Focus on U.S. EB-5 Investment Immigration and life in the United States: It is truly exciting news that one of the oldest federal policies addressing climate change has been declared expired! On January 1, the U.S. Congress repealed a series of tax incentives for clean energy, including tax deductions for wind power generation. This policy has provided direct financial subsidies to wind power operators since 1992 and has received strong support from both Democrats and Republicans. Some supporters are still striving to extend this incentive for another year, and to apply it to other clean energy sources as well.
However, the result of such actions often fails to achieve the initial goal: reducing carbon oxide emissions. Policymakers are reluctant to acknowledge the true costs of achieving emission reduction targets and disclose them to taxpayers, thus seeking more realistic and effective methods to reduce pollutant emissions, such as taxing polluting fuels. Consumers demand cleaner energy while relying on market regulation and forces, rather than solely depending on tax policies and the impulses of legislators.
The U.S. Congress has approved technical tax reductions for related clean energy, such as wind power generation and electric vehicles. Other related industries have also received government support. Over time, the clean energy sector is capable of creating more job opportunities. For this reason, in 2012, the federal government introduced 42 tax incentive policies for energy (data from Senate Finance Committee Chairman Baucus). But how far can the path of developing clean energy go by solely relying on tax policies? Inaction on climate change is certainly unforgivable. However, if Congress cannot tolerate imposing a carbon tax, they should at least make efforts to reduce energy waste: treating all green energy-saving technologies equally and then selecting the most viable technologies. As part of a simplified tax code proposal, Mr. Baucus introduced a policy discussion draft that reviewed all existing federal energy legislation to identify alternative energy initiatives. In simple terms: allowing any clean energy to compete freely on an equal basis. He pointed out that as of 2013, the U.S. had spent approximately $150 billion on clean energy tax incentives over the past decade.
If Mr. Baucus's plan is followed, this figure could be cut in half.
This plan would significantly change the clean energy market in the United States, but it is difficult to implement. If the government replaces policy-based tax incentives with the same level of financial subsidies, it would benefit energy companies in attracting more private capital for operations. The government should focus more on the production integration of clean energy to meet the demands of the grid, rather than just subsidizing every kilowatt-hour generated in a clean manner. Simple and feasible policies will still be transparent taxation on carbon emissions.