President Obama’s FY 2016 Budget Increases Cleantech Spending

Good news for cleantech—under the Obama administration’s proposed fiscal 2016 budget, the sector could be looking at a significant boost in federal funding, the proposed allocations marking the administration’s boldest-yet step toward a more renewable-focused energy paradigm. In addition to repealing nearly $50 billion in tax breaks for the oil, natural gas, and coal industries, earmarks $7.4 billion for clean energy projects (an increase from Obama’s $6.9 billion proposal, of which Congress approved $6.5 billion last year), and sets up a $4 billion fund intended to spur states into slashing power emissions quicker and more dramatically.  As The Wall Street Journal’s Amy Harder points out, the budget “underscores an intensifying push by Mr. Obama on his climate agenda, which he hopes to cement as a presidential legacy in his final two years in office.”

All states are eligible to tap into the $4 billion fund, according to Reuters. Under the proposed “Clean Power Plan,” states will be required to meet certain emissions benchmarks. Those that promise to exceed target emissions cuts can qualify for money to invest in emissions-reduction technology.

A portion of the $7.4 billion allotment would permanently extend a 30 percent investment tax credit for solar systems, which is set to expire at the end of 2016. It would also permanently reinstate a production tax credit for wind farm operators that lapsed at the end of 2013. The tax incentives would cost the government about $31.5 billion over the course of a decade.

The 2016 budget reflects a $29.9 billion request from the Department of Energy, $2.5 million more than the amount enacted for 2015. The DOE plans to use $10.7 billion of this money toward “scientific research, development and deployment of new clean energy technologies and advanced manufacturing,” Reuters reports. Energy Secretary Ernest Moniz is quoted as saying the budget request is illustrative of investments in technologies for making the electric grid more resilient and reducing methane emissions from natural gas systems, according to Reuters.

Of course, in a GOP-controlled Congress, the administration’s proposals are not a lock. As International Business Times points out, Republican leaders say the Clean Power Plan will increase state electricity costs and impede US business and manufacturer operations. Likewise, conservatives have traditionally come out against solar and wind energy tax credits, and pushed to reduce federal spending on clean energy research, according to International Business Times. Oil industry lobbyist The American Petroleum Institute has also spoken out against the administration’s plan, which would increase oil and gas producers’ taxes by $95 billion, the Times reports.

Rep. Lamar Smith (R-TX), who chairs the House Science Committee, said the president “chose to push a partisan agenda,” with the budget proposal, citing “costly ineffective energy subsidies” and a provision to allot $500 million to a United Nations program to promote “climate change resiliency” outside of the US, Science magazine reports. Democratic House science committee member Eddie Bernice Johnson (D-TX), meanwhile, lauds the budget for helping “ensure the U.S. can compete in a 21st Century global economy and solidify America’s place as a scientific and technological leader.”

To read the full Reuters article cited in this story, click here

To read to full Wall Street Journal article cited in this story, click here

To read the full International Business Times article cited in this story, click here

 

 

Tags: Policy

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