Showing posts with label federal. Show all posts
Showing posts with label federal. Show all posts

Canada's Hopes for an Environmentally Friendly Federal Leadership Now Rest with Justin Trudeau

The federal Liberals officially named 41 year old Justin Trudeau as their new leader on Sunday April 14, 2013.  The ruling Conservatives are telling Canadians that they have to make a choice between the economy and the environment, Trudeau believes this is a false choice.

Justin believes that the Conservative doctrine of forcing Canadians to choose between the economy and the environment is reckless and dangerous.

As he explains in his website, "Instead, it is increasingly obvious that a healthy economy is dependent on a healthy environment, and the two will thrive resiliently if we engage in responsible actions based on long-term thinking."

Justin won the support of about 80 per cent of Liberals who gave him an overwhelming first-ballot victory, 45 years to the month after his father took the same position. Justin is the eldest son of former Canadian Prime Minister Pierre E. Trudeau.

Elected on October 14th, 2008, as Member of Parliament for Papineau, Justin's three primary policy positions involve youth, diversity and the environment.

Justin was a member of the House’s Standing Committee on the Environment and Sustainable Development. In his years before politics he worked with various environmental groups dedicated to the protection of our Canadian wilderness, supplementing his activism with graduate work in environmental geography at McGill University.

Justin has a difficult road ahead of him if he is to succeed in taking his party from its current third place standing and returning to its former glory as the country’s so-called “natural governing party.” If he is to be the next Prime Minister he will have to defeat Harper's Conservatives and move ahead of the NDP led by Thomas Mulcair.

Despite these difficulties opinion polls suggest that the new Liberal leader could very well win an election if it were held today.

© 2013, Richard Matthews. All rights reserved.

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Republicans Oppose the PTC but Support Oil Subsidies

It is not surprising that many Republicans who oppose the Production Tax Credit (PTC) for renewable energy, support fossil fuel subsidies. Although the PTC was extended through 2013, some Republicans have vowed to continue their push to kill it. Conservatives are well known for their love of free markets and distrust of government subsidies, unless of course it involves fossil fuels. Some Republicans in Congress have made it clear that they will seek amendments that erode the PTC.

Republicans including the 2012 presidential nominee Mitt Romney, wanted to let the PTC expire. Romney and other Republicans who oppose the PTC say it costs too much and props up businesses with government subsidies.

Romney spokesman Ryan Williams said in an email that Romney "believes the government should stop playing venture capitalist and doling out open-ended subsidies, and instead encourage private sector innovation and market competition.” This is part of the same conservative philosophy that advocates for unbridled free markets and supports deregulation.

In September of 2012, 46 Republicans voted against the PTC while in March 2011, 46 Republicans voted against closing tax loopholes that let Big Oil collect $4 billion in annual subsidies.

Some Republicans, including Iowa Rep. Tom Latham, Sen. Scott Brown, and Gov. Terry Branstad support the tax credits for renewable energy because of the jobs they create. It is estimated that the expiry of the PTC would have resulted in the loss of 10,000 jobs in the wind industry alone.

However there are other powerful members of the GOP that remain opposed to the PTC. Representative James Lankford (R-OK), the chair of the newly formed House Oversight Subcommittee on Energy Policy, Health Care and Entitlements, has made it clear that his Subcommittee is suspicious of the federal government's support for renewables including the PTC.

The wind industry may have received a one-year reprieve, but if some Republicans have their way this extension will be clawed back by subsequent amendments.

Related Videos
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A Condensed History of the Production Tax Credit (PTC)

After 20 years and many extensions, the federal Production Tax Credit (PTC) expired at the end of 2012, but then miraculously it was once again resurrected in an eleventh hour addendum to the fiscal cliff deal. On Jan. 1, 2013, the final vote of the 112th Congress secured the extension of the PTC. Although 60+ tax provisions were due to expire the last minute deal granted the PTC a stay of execution.

In the final hours of the fiscal cliff negotiations, a provision in the American Taxpayer Relief Act (P.L. 112-240) added a $12 billion, one year extension of the PTC. The $12 billion figure ($12.1 billion to be exact) was estimated by the Congressional Joint Committee on Taxation. Just before 2 A.M. on New Year’s Day 2013, the Senate overwhelming voted in favor of the deal (89-8).

Alongside this most recent extension, a change to the PTC was introduced that relaxed the eligibility requirements for the credit. Renewable energy projects now need only ‘commence construction’ by January 1, 2014, to qualify for the credit, instead of the projects being ‘placed-in-service’ by that date. Further the threshold on tax cuts was dropped to $450,000 from $1,000,000.

No discussion of government support for renewable energy would be complete without at least mentioning American Recovery and Reinvestment Act (ARRA) specifically section 1603 which has had a significant impact on installed renewable energy capacity. (Section 1603 made renewable energy grants available to project developers).

Markets were rattled by the immanent expiration of the PTC at the end of 2012 as concern mounted about an industry which rises and falls on votes by Congress. Nonetheless, the PTC has been a growth engine for renewable energy and it has succeeded in giving investors the confidence to invest.

© 2013, Richard Matthews. All rights reserved.

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President Obama's 2013 Budget Seeks to Increase EV Tax Credits

President Obama's proposed budget seeks to increase tax credits for electric vehicles (EVs). According to the President's proposed budget, EV incentives would increase from $7,500 to $10,000 beginning in fiscal 2013.

The idea behind the tax credit program is to increase sales of EVs which are not selling as well as many had hoped. To attain the President's goal of a half million EVs on the road by 2015, the Verge reports that sales of plug-in vehicles will need to grow by 143 percent each year in order for the President to reach his goal of a million EVs on the road by 2015.

Americans are still not habituated to the idea of EVs. One factor inhibiting the growth of EV sales in the US is the relatively high sticker price. The Tesla Model S sells for $57,400 and the Fisker Karma sells for a whopping $102,000. Even the more affordable Nissan Leaf sells for $35,000.

Governments have an important role to play fostering the adoption of electric vehicles. Even though ten thousand dollars is a sizable tax credit, EV prices may have to be lower still to make these vehicles affordable for the average American.

It may be hard to gain desirable penetration rates for EVs until they have a lower price point and that can only be achieved through mass production. To help the sector to grow and achieve economies of scale, governments may have to fill the void until market demand can drive mass manufacturing.

For a summary of the enviromentally oriented elements within President Obama's 2013 Budget click here.

© 2012, Richard Matthews. All rights reserved.

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