The House Ways and Means Committee held a hearing Wednesday on ways to provide energy-related tax incentives to encourage more green jobs.
Ways and Means Chairman Sander Levin, D-Mich., pointed out the effects of various clean energy tax credits included in the Recovery Act. The Energy Information Administration estimated that the Recovery Act will result in twice as much electricity generated from wind than would have been produced without the policies included in the Recovery Act, he said in his opening statement. Over the next six years, the EIA projected that residential tax credits for solar equipment will encourage more than 1.6 million solar units to be installed nationwide.
Assistant Treasury Secretary Michael Mundaca talked about some of the energy proposals in the administrations budget, including the extension of a $1.00-per-gallon incentive for biodiesel and renewable diesel fuel and a $2,000 income tax credit for the construction of energy-efficient homes.
The administration also wants to repeal several tax incentives for fossil fuels.
Current law provides a number of credits and deductions that are targeted towards certain oil, gas and coal activities, Mundaca said in prepared testimony. These tax subsidies, which are not designed to correct an existing distortion or market failure, lead to an over-allocation of resources to these industries and an under-allocation of resources to other industries.
Matt Rogers, senior advisor to the Secretary of Energy, noted that the Energy and Treasury Departments had selected 183 projects in 43 states to receive $2.3 billion in clean energy manufacturing tax credits under Section 48C of the Recovery Act, and to award $3.1 billion in payments in lieu of tax credits to 718 renewable energy generation projects in 44 states.
These programs were particularly effective in getting money out the door quickly to put people back to work on great projects that would otherwise have been idled in the face of the Great Recession, he said.
During the fourth quarter of last year, FederalReporting.gov reported that 51,700 jobs were directly attributable to Recovery Act clean energy investments, and the Council of Economic Advisors estimated that the Recovery Act clean energy investments would create 719,000 job years in total.
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