Sunday, December 03, 2017

The GOP Tax Bill Is Basically like Throwing Gasoline on the Dumpster Fire that Is the Climate Crisis

The latest Republican scheme isn’t just bad news for the economy, it will be terrible for the environment.


Republicans found a way to make their tax bill into an attack on the climate. (Credit: Patrick McDermott/Washington Nationals/Getty Images) Click to Enlarge.
The GOP’s latest tax bill won’t just benefit the wealthy at the expense of everyone else, it will also be horrible for the planet—and not just in the ways you might think.  In the Republicans’ bid to pass as many of their long-standing priorities as possible, they’ll also do plenty to cook the planet.

For starters, the bill would extend a generous corporate tax cut to the very industries now careening the planet and humanity toward a hotter, wetter future, namely coal, oil, and gas.  It would also open up 1.5 million acres of Alaska’s Arctic National Wildlife Refuge for oil and gas drilling.  An analysis from Oil Change International released last year found that nearly two-thirds of fuel reserves in existing oil and gas fields need to remain undeveloped to keep the earth from warming beyond 2 degrees, a threshold that itself would mean large-scale climate impacts and severe loss of land in low-lying areas.

The bill could also make it harder for the United States to break its addiction to fossil fuels.  Though it wouldn’t eliminate existing tax credits for renewable fuel sources, the legislation could make these credits harder to access.  On November 22, a provision many renewable energy advocates hoped would get left behind in the House version of the tax package—the Base Erosion Anti-Abuse Tax (BEAT) provision—re-emerged in the Senate version, prompting a vocal response from solar and wind trade associations.  “We normally don’t speak in these kinds of terms, where we talk about collapse of the tax equity market,” a joint letter from several renewables trade associations stated in response.  “We’re looking at the end of the principal financing mechanism that has fostered growth of the renewable energy sector since the 1990s.”

The BEAT provision would essentially add uncertainty for investors in renewable projects that they could collect tax equity from Production and Investment Tax Credits, which currently subsidize around a third of wind and solar development.  According to a blog post from Keith Martin, a lawyer specializing in tax and project financing, so-called tax equity financing provides around 40 to 50 percent of the funds for the average solar project and 50 to 60 percent for the average wind project.

Were it to be implemented, the BEAT provision would mean that neither renewable energy companies nor their investors could be sure at the onset of a wind or solar project whether they could claim the relevant tax credits as tax equity, threatening to upend one of the primary incentives offered by the government to spur investment in renewable energy.  Because the measure would also apply retroactively, Martin told the trade publication Utility Dive that it could cut into tax credit claims on deals “closed as far back as 2008.”  (For more detailed explainers on the BEAT provision, see here and here.)

The bill may also lead to a slew of more indirect impacts as well.  By overturning the ban on churches and other non-profit groups’ engagement in religious activism, the bill could further empower climate-denying politicians around the country.  Religious institutions hold a range of beliefs on climate change and the environment, though a 2015 survey of evangelicals—one of the country’s most influential religious groups—found that just 24 percent think of global warming as “a serious problem.”

Read more at The GOP Tax Bill Is Basically like Throwing Gasoline on the Dumpster Fire that Is the Climate Crisis

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