Congress Politicizes Energy Incentives, 116,000 Jobs in Jeopardy

By Alisha Fowler and Jesse Jenkins. Cross-posted from the Breakthrough Blog.

On Tuesday the Senate failed to pass the Renewable Energy and Job Creation Act of 2008 (50-44). The bill contained, among other things, critical production tax incentives for the rapidly growing renewable energy industry. The Senate may get another chance to vote on the incentives this month, but their bickering, politicization of the issue and ultimate stalling is looking more and more like a de facto decision: No to clean energy.

If the renewable energy industry is unable to count on the incentives for next year they will count them out as they shape their workforce plans and pace of development. In other words, they'll cut thousands of jobs and scale back investments as they prepare to weather yet another expiration of the critical renewable energy incentives.

Yesterday's front page headline of the Sacramento Bee was hard to miss, "Gas Prices Soar, Congress Bickers." A comparable headline comes to mind for the renewable energy tax incentives: "Congress Politicizes Energy Incentives, 116,000 Jobs In Jeopardy."

Continued growth of the rapidly expanding renewable energy industry would be a win-win for America's economy and our environment. Several foreign wind energy companies were just starting to open U.S. manufacturing plants, but they will not continue let alone expand while Congress remains on the fence. (We should also note that these companies are FOREIGN precisely because of this kind of pervading political uncertainty in the United States surrounding clean energy investment.)

This kind of politicized debate and partisan gridlock on renewable energy incentives was not as big of a deal for the industry, or our national economy a few years ago. In 1999, for example, the wind industry was a fifth of its current size and pretty insignificant in our overall economic picture. Now, however, due to several years of rapid and robust growth in the wind and solar industries in particular, more than 100,000 jobs, tens of billions of dollars, and the ability of the U.S. to be a world leader in clean energy technology are at stake.

Source: AWEA

Trade organizations representing renewable-energy companies on Capitol Hill are already reporting less growth and increasing anxiety over whether the incentives will be available. The American Wind Energy Association estimates that more than 116,000 U.S. jobs and nearly $19 billion in investment could be lost in just one year if the incentives are not renewed. Monique Hanis, spokesperson for the Solar Energy Industries Association, reports that job losses are already happening as the outlook becomes increasingly uncertain. Hanis pointed out that, "In the long term what [this delay] means is that the U.S. is going to give up its leadership position in the technology."

So what happened? Why is Congress fiddling while more than a hundred thousand good jobs and an entire year's worth of clean energy deployment are at stake? The popular story is that Republican obstructionists are standing in the way of a progressive clean energy agenda. From the recent demise of the Climate Security Act, to efforts to re-invest oil and gas subsidies, to the renewable energy incentives, it's all the fault of Republican obstructionists protecting fossil fuel industry turf. While there's definite truth to that, and Republicans have overwhelmingly come down on the wrong side of most smart energy issues, if we're really committed to seeing a solid investment in a clean energy future it behooves us to look a little closer than that.

Truth be told, demagogue's on both sides of the isle are responsible for the current imperiled fate of our nation's renewable energy industries. The bill itself is not that controversial (who doesn't want 100,000 good jobs to stick around?!) but it has been complicated over the offsets included in the legislation. Both the Senate and the House have passed different versions of a renewable energy incentives bill several times since convening in 2006, so that's not the source of conflict. Disagreement begins when they debate how to pay for it; or whether or not to just swipe the national credit card again and tack on the relatively minor cost to the ballooning national deficit.

Ironically, it's Republican lawmakers who argue there is no need to find "offsets" of "pay for" provisions to cover the cost of extending the incentives (so much for the former party of fiscal conservatism, eh!?). Otherwise, they see the bill as a just another tax increase and have vowed to block it. House Democrats, on the other hand, currently refuse to pass the bill without the offsets to cover the cost. They have repeatedly linked the bill to repealing subsidies or instituting windfall taxes on oil companies - something they know will instantly jeopardize bipartisan support (not to mention lose at least one "Oil Patch" Democrat). While this time around, Senate Dems found another "pay for" provision (taking a bite out of rich hedge fund managers' profits - perhaps slightly more palatable to the GOP than oil profits), the vote on the renewable energy incentives bill was brought to the floor directly after another vote on repealing tax breaks for Big Oil. Not surprisingly, both votes failed. Again.

Of course, "Drill! Drill! Drill!" Republicans who want to drill for oil in ANWR (and everywhere else!) as opposed to developing fossil fuel alternatives deserve to be singled out. And perhaps Democrats scored some political points. But the long term effects of stunting the renewable energy sector will be far greater than any short term gains in an election year.

So forget "pay-go" for now, and give renewables the green light they need. It's not that costly when you compare it to the war in Iraq. Right now, this is not about squabbling Republicans or Democrats. It is about supporting an industry that will seriously stumble without government assistance. It is time to stop messing around with a bill that has immediate and hard-hitting effects on our economy, our ability to be an international clean energy leader, and ultimately our energy prosperity.