As U.S. Aid to Clean Energy Dwindles, Pondering What Could Come – NYTimes.com
Michael A. Levi, senior fellow for energy and the environment at the Council on Foreign Relations, said there were two main avenues for government support for scaling up the clean energy industry.
The first, he said, is to put money into individual companies through subsidies, grants or loans, a path that is politically perilous and difficult to carry out in a big government bureaucracy.
“The second,” he went on, “is to create demand through a federal clean energy or renewable energy standard, or a price on carbon, all of which would make the market for innovative clean energy technologies bigger and increase incentives for innovators. The two parties are sharply split on all those possibilities.”
President Obama has abandoned his support for a cap-and-trade system to limit greenhouse gas emissions, advocating in its place a goal to double the nation’s production of clean energy by 2035. Though the president’s idea has enjoyed bipartisan support in the past, Congress has not moved to embrace it.
In recent months a discussion of imposing a carbon tax has been percolating in Washington as part of a broader tax reform and deficit reduction plan. Such a tax might generate new money for clean energy development, but in the current fiscal and political environment such tax revenue is more likely to be devoted to other purposes.
There is also a growing discussion of how to attract more private capital to the clean technology sector. Some economists and green tech entrepreneurs have advocated a change in federal tax law to allow renewable energy companies to use a tax-advantaged investment device known as a master limited partnership, which has attracted $350 billion in private investment but is limited to oil and gas extraction and pipeline projects.