CLEAN ENERGY TAX CREDITS LARGELY GO TO HIGH-INCOME EARNERS: Clean energy tax credits have largely benefited higher-income tax filers, according to a new report by economists , illustrating a major pitfall for the Biden administration in its efforts to lower emissions through subsidies.
As Nancy writes , the top quintile of households by income received 60% of $47 billion in clean energy tax credits claimed from 2006 to 2021, according to the paper, which was done by researchers at the University of California, Berkeley, and circulated Monday by the National Bureau of Economic Research. The tax credits were awarded for buying heat pumps, solar panels, electric vehicles, and other clean energy technologies.
Something to consider: Many of the credits were subsequently expanded by the 2022 Inflation Reduction Act passed by Democrats and signed by President Joe Biden . The study did not directly address the effects of that law but underlined a common criticism that enacting incentives for the adoption of zero-carbon technologies, without also imposing penalties on carbon emissions, is insufficient to reach the goal of net-zero emissions by 2050.
“The cost effectiveness of tax credits hinges on their ability to increase adoption of clean energy technologies,” the paper noted. “Overall, we find little correlation between tax credits and technology adoption.”
EV tax credit stat: The report added that the disproportion of the tax credits claimed by high-income earners is most dramatic with the electric vehicle tax credit, with the top quintile receiving 80% of all credits and the top 5% receiving about 50% of them.
The pattern of concentration of high-income filers claiming the benefits has remained “relatively constant over time,” the report noted.
What the economists are suggesting: Analysts have argued that the most effective way to reduce emissions, while incentivizing the adoption of clean energy technologies, would be to price them directly through a carbon tax or a cap-and-trade program, according to the paper. Those policies are opposed by Republicans and many centrists.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writer Nancy Vu ( @NancyVu99 ), with help from policy editor Joseph Lawler . Email nancy.vu@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here . If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
NEW EPA PESTICIDE PROTECTIONS – The Environmental Protection Agency is enacting new protections aiming to protect farmers and the general public from pesticide drift.
How? The EPA says it will now analyze the likelihood of people being exposed to a pesticide when it drifts away from where it’s applied earlier in the regulatory process. The agency says the updated process will protect individuals from pesticide exposure 15 years sooner in the review process than before.
Some context: Historically, the agency conducted chemical assessments of potential exposure to pesticide drift during registration review, which happens every 15 years after a pesticide is approved. Now, the EPA is stating it will complete a chemical specific spray analysis during the initial registration process – or during the review process for new or amended uses of existing products. This is to ensure both new and old pesticide registrations are held to the same standards.
Read more on that here.
API LAUNCHES AD CAMPAIGN FOR CONVENTIONS: The American Petroleum Institute has launched a new ad campaign this morning that will run during both the Republican and Democratic national conventions, aiming to tie inflationary concerns to U.S. energy production.
The new television and digital ad campaigns follow a recent Morning Consult poll that shows 9 in 10 voters are concerned about inflation. And 83% of voters that participated in the poll were for producing more oil and natural gas in the U.S. to help lower energy and utility costs.
“This never ending cycle of inflation is taking more and more out of my paycheck,” the actor in the ad says. “Why aren’t we harnessing more of America’s natural resources to help reduce inflation? We can’t afford to wait any longer.”
Why it matters : Inflation reliably polls as a top issue in the election, and voters are particularly sensitive to gas prices.
But: After soaring in past years, energy inflation has moderated recently, and it has run lower than overall inflation in the past year. Also, it is worth noting that the U.S. is the world’s largest oil producer, according to the Energy Information Administration.
SEIA RELEASES NEW SOLAR STANDARDS: The Solar Energy Industries Association released two new voluntary industry standards for public comment on Monday – efforts the group says will promote consumer protection by enabling “transparent, ethical” solar sales practices and tightening safety standards for rooftop solar and storage installations.
The first standard, standard 401 , will outline training requirements for those selling solar panels to help establish ethical sales practices. The standard will provide customers with cost disclosures, key contract terms, and technology information.
The second standard, standard 201 , creates a baseline for how residential and small commercial solar and storage systems are installed, aiming to set better safety practices while enhancing grid reliability.
“These groundbreaking standards reflect the solar and storage industry’s commitment to ensuring every customer has a great experience going solar,” said SEIA president and CEO Abigail Ross Hopper said in a written statement .
SEIA has been convening a broad set of stakeholders to develop a set of standards that aims to manage the industry’s growth. Currently, the group is creating 11 industry-wide standards, including standards on supply chain traceability and decommissioning.
Read more on that here.
ABBOTT VS CENTERPOINT: Texas Gov. Greg Abbott denounced utility CenterPoint Energy on Sunday for its handling of blackouts following Hurricane Beryl’s arrival to the state – and has demanded the group outline a plan for how it will handle hurricanes in the future, while calling for an investigation into the utility.
The deets: As the Texas Tribune lays out, the governor is demanding that any plan from the group must include better preparation for linemen, beefing up the workforce to restore power, and cutting down trees that could crash into power lines.
But if they don’t comply with the request, Abbott said, he will have to enact an executive order to shape the group as he sees fit.
Abbott also sent a letter to Thomas Gleeson , chairman of the Public Utility Commission of Texas, to probe into CenterPoint and deliver a report by Dec. 1, following claims of “penny-pinching and cutting corners.”
“Was CenterPoint protecting Texans, or was it protecting its own pocketbook?” Abbott said during Sunday’s press conference.
On Monday, Gleeson announced he ordered the PUC to initiate an investigation into CenterPoint.
The significance: The company has faced criticism since Hurricane Beryl caused blackouts for nearly 3 million residents. Officials stated the utility failed to alert customers of when power would be restored. More on that here.
RUNDOWN
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