Danny Bradbury, 2010.08.10
Senator John Kerry is to have another crack at introducing comprehensive energy legislation capable of curbing carbon emissions, following the death of his controversial climate bill last month. This time, however, the bill will make use of incentives rather than punishments.
The senator last week introduced the Clean Energy Technology Leadership Act of 2010, which abandons the emissions trading proposals included in the previous climate bill developed by Kerry and independent senator Joe Lieberman and instead focuses on the introduction and extension of incentives and for renewable energy developers and users.
In addition to providing $3.5bn (£2.2bn) in extra funding for clean renewable energy bonds as a way to fund green infrastructure projects, the legislation would also extend tax credits designed to promote the use of renewable energy, some of which expired last year.
For example, it would resurrect the tax credit for biodiesel and renewable diesel, which ended on 31 December last year. Congressional leaders have not yet renewed the tax break, although it was proposed as an amendment to the Small Business Jobs and Credit Act of 2010 last month.
The credit would be retroactively enabled for this year, and would run until the end of 2012.
The transportation sector stands to benefit extensively from the legislation, should it be passed. In addition to the biodiesel tax credits, Kerry is hoping to modify the cellulosic tax credit to include algae-based fuels, while providing new incentives for natural gas-based heavy vehicles. Batteries for advanced vehicles will also receive extra support through the removal of the current tax credit cap faced by developers.
The bill would also retroactively extend R&D tax credits for energy research, while providing an additional 10 per cent credit for advanced energy research and would extend the credit for manufacturers of energy appliances.
Similarly, the bill would provide tax incentives for energy-efficient residential and commercial buildings, while piling more money into an advanced energy manufacturing credit and removing caps on tax breaks for solar energy projects.
The proposals were welcomed by renewable energy industry groups which have repeatedly warned that the sector could face job losses if urgent steps are not taken to extend several tax credits that are due to expire at the end of the year.
Kerry is still smarting from the failure of the Kerry-Lieberman bill, which was dropped by Democrat leaders last month after they admitted they could not secure the 60 Senate votes needed to pass the bill.
The comprehensive climate and energy bill initially included proposals for an emissions cap-and-trade scheme that would have introduced a carbon pricing mechanism for energy-intensive firms.
However, the bill was widely pilloried as an energy tax by Republicans and despite repeated attempts to secure bipartisan support by watering down the bill, Democrat leaders eventually decided it was not worth pursuing a Senate vote ahead of Congress’ summer recess.
The Democrat leadership has signalled that it wants to return to energy legislation in the autumn and Kerry will be hoping that his latest bill may be able to secure a vote ahead of the crucial mid-term elections. However, it is still likely to face staunch opposition from Republicans who remain fiercely opposed to measures that they believe will increase the US deficit.