Can a breakthrough in the U.S. climate change fight come from the energy tax policy reform proposed by outgoing Senate Finance Committee Chair Max Baucus (D-MT)?
“It is time to bring our energy tax policy into the 21st century,” explained Senator Baucus at the December announcement of his energy tax policy makeover. “Our current set of energy tax incentives is overly complex and picks winners and losers with no clear policy rationale.”
Before stepping down to become U.S. Ambassador to China, Baucus suggested “dramatically simpler” incentives that would:
- replace 42 inefficient and unnecessary incentives with two simple and transparent ones,
- drive domestic and clean energy production,
- be technology-neutral and reward all clean sources, and
- give investors certainty about the benefits and their phase out.
Renewables get 45 percent of the existing $16.4 billion in tax breaks, according to the Congressional Budget Office, while 29 percent go to energy efficiency, 20 percent go to fossil fuels and 7 percent to nuclear energy.