How the GOP Tax Plan Could Hurt Clean Energy Industry

November 7, 2017

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“Cut, cut, cut.” That’s basically the name President Donald Trump gave to the GOP tax plan. Unfortunately, many of these cuts are to clean energy initiatives instituted by prior administrations. The effects of these cuts will heavily impact the clean energy industry, leaving us, at best, with energy shortages and rolling blackouts, and at worst, lagging woefully behind the rest of the world in terms of energy production.

Repeal of the Inflationary Increase for Renewable Energy Tax Credits

One of the direst aspects of the GOP bill in terms of clean energy is the repeal of an increase, adjusted per inflation, for companies involved in the production of renewable energy. To make an analogy, this is akin to not receiving a raise for the next five years while the costs of your rent, food and other staples of daily living keep going up. You’d bring in as much money, but have far less buying power.

The effects of this could potentially stall advances in innovation made by renewable energy companies. Worse, it may dissuade other clean energy startups from even getting past the drawing board.

The impact of this goes far beyond the continued and irreversible damage to our environment by our continued reliance of fossil fuels. Advancements in solar power, wind energy and hydroelectric energy will slow or stop all together. In years to come, this will also put the United States lagging far behind other nations who have invested in renewable energy sources.

As a result, the already-indebted US may find itself needing to borrow power from its neighbors to keep the lights on. The price of electricity will rise exponentially, and American citizens, many of whom are already living paycheck-to-paycheck due to wage stagnation, will literally find themselves in the dark. It’s not hard to imagine scenarios similar to a horror movie breaking out in huge areas of cities gone entirely dark.

In addition to not adjusting green energy tax credits for inflation, the GOPs plan seeks to eliminate green energy subsidies overall. One such credit on the chopping block is the repeal of the 30% tax credit for buying solar energy equipment. Homeowners who invested in solar energy for their homes in hopes of receiving a nice payment in terms of a tax credit will be in for an unwelcome surprise should the GOP plan pass.

Overall, under the Republican plan, all green energy credits are set to phase out completely by the year 2020.

The GOP tax plan maintains subsidies for the non-renewable resources of gas and oil. However, it slashes the subsidy for wind power production from $.23 per kilowatt hour down to $.15 per kilowatt hour. The wind industry has opposed the measure on the grounds that it disrupts investment planning. Worse, the measure effectively lays off over 100,000 workers in the wind industry, and threatens to close down at least 500 American factories.

Another clean energy initiative instituted by previous administrations is also on the chopping block under the GOP plan. In order to move away from traditional gasoline-driven vehicles to cleaner electric vehicles, those who invested in alternative vehicles were due a $7,500 tax credit simply for making the choice to do the right thing. While its impact on the individual buyer’s decision-making is unclear, the fact remains that the $4 billion taxpayers now save annually by going green will disappear.

The original goal of the Clean Power Plan was to reduce the 2005 level of carbon dioxide emissions by 32% by the year 2030. Improvements have already been seen: in 2012, the levels of carbon dioxide emissions had already been reduced by 12%.

But with this tax plan, as in his withdrawal from the Paris Climate Agreement, President Trump effectively ignores the preponderance of scientific evidence proving climate change.

While the consequences of climate change will be seen worldwide, the United States will be particularly hit due to its dearth of coastal cities. Should the earth’s temperature rise by as little as 2% over the next decade, vast swaths of cities such as New York, Miami, San Francisco and San Diego could find themselves underwater.

In addition, other disturbances in weather patterns will cause longer, more intense heat waves, causing crops to dry up, leading to higher food prices. Greater and more destructive wildfires will break out, and rising ocean temperatures will lead to stronger, more devastating hurricanes. The US has already witnessed this with the recent devastation of Hurricanes Harvey and Irma and the wildfires destroying much of Northern California.

A nation’s fiscal policy is a direct reflection of the character of the nation as a whole. Sadly, the GOP’s budget shows a careless disregard for the citizens of tomorrow. Should the GOP plan be adopted, the US is effectively saying that putting a few more dollars in the pockets of the wealthy today is more important than preserving the planet for all the children of tomorrow. And that is the kind of message no modern day nation should send.