Senate Draft Tax Plan Backs Clean Energy

Federal energy-related tax breaks would be redirected to support businesses that reduce greenhouse gas emissions under a legislative discussion draft released last week by Sen. Max Baucus (D-Mont.), Senate Finance Committee chair. The draft, he says, incorporates proposals from 14 senators and would tie technology-neutral tax incentives to emissions. For instance, an electrical power plant would receive a tax break if it were 25% “cleaner” than other electricity-producing facilities. Clean is defined as greenhouse gas emissions divided by electrical output. Currently, there are 42 U.S. energy tax incentives, Baucus says. More than one-quarter of the incentives support fossil fuels and more than half are temporary and thus provide little investment stimulus. Baucus’s proposed measure would provide long-term incentives. If current incentives are extended, they will cost nearly $150 billion over the next 10 years, the draft says.