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Editorial: Penalizing renewable energy puts economy on the wrong path

If the pending loss of crucial deductions and an exploding budget deficit weren’t reason enough to hate the tax bill moving toward approval in Washington, here’s another: Tax legislation supported by congressional Republicans would penalize renewable energy sources while favoring producers of fossil fuels. It looks backward and seeks to trip up an industry that is crucial both to the planet and to the Western New York economy.

The renewable energy industry is growing, but remains in development. Wind and solar energy hold the promise of serving many of the country’s future needs without the environmental hazards that fossil fuels such as oil, gas and coal impose on a warming environment.

Western New York, with a significant push from Albany, has made a big bet on solar energy. The $750 million Tesla plant in South Buffalo will be the largest solar panel manufacturing factory in the Western Hemisphere, giving Buffalo an advantage in an industry of the future. Solar energy will play an essential role in diminishing the fossil fuel gases that are significant contributors to a dangerously warming planet (see: this spring’s hurricanes; California’s wildfires).

The tax bill, as it stands, cares nothing about that. It could, and should, change as the House and Senate seek to agree on a common approach, but for the moment these clean industries are threatened with the loss of tax breaks and other disincentives.

Meanwhile, the Senate’s bill would open the Arctic National Wildlife Refuge in Alaska to oil drilling. And a recent amendment by Sen. John Cornyn, R-Texas, would lower tax rates on the profits of oil and gas companies that, to be sure, have been stressed by the collapse of oil prices.

These are crucial matters. There can be no doubt that the climate is warming. Even the federal government now agrees. A report released last month by 13 federal agencies flatly concluded that global temperatures are rising to their highest level in the history of civilization and that humans are the main cause. That won’t change unless humans make it change.

Among the factors that the tax writers ignore is that fossil fuels conceal their true costs. Producers of oil, gas and coal don’t include in their pricing the expense of remediating their environmental consequences. That burden paid by the public is baked into their business model.

Yet Congress, whose responsibility is to protect the national welfare, is pushing a tax bill that would coddle the fossil fuel sector while undermining renewable energy. It’s exactly the wrong direction. As the world’s second-largest emitter of greenhouse gases – China is first – the United States has both a self-interest and global responsibility to reduce those emissions.

That’s the promise of renewable energy, which is both inexhaustible and clean. Wind and solar energy, in particular, have been among the fastest-growing sectors of the nation’s energy economy, but account for just 7 percent of the electricity produced in 2016. They still need help, not forever, but for a while longer.

It is unfortunate but inescapable that energy policy is going to create winners and losers. That problem was on display recently when a coal company employee in North Dakota thanked President Trump for the House bill’s push to eviscerate the value of a tax credit offered to the wind industry. With its Great Plains topography, North Dakota is among the nation’s leading producers of wind energy.
“The production tax credit has destroyed the energy market, especially in the Midwest,” Jessica Unruh, who is also a state representative, told the president. “Wind production has really eroded our state tax base and replaced coal production when it comes to electricity production.”

It’s true, and it’s hard – just as it was in Buffalo when the U.S. steel industry collapsed. Things change. It is up to government to take the lead in easing that pain and helping, as state government did in Buffalo, to foment a new economy.
With its tax bill, Congress is failing that crucial test. It needs to wake up. California is on fire.

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