NEW ANALYSIS: Build Back Better Act’s Clean Energy Tax Credits Pay for Themselves
tags
FOR IMMEDIATE RELEASE
February 9th, 2022
Contact: Jason Phelps, jason@climatepower.us
WASHINGTON, DC — Today, the Energy Policy Institute at the University of Chicago and the Rhodium Group released a new analysis that found the Build Back Better Act’s clean energy tax credits more than pay for themselves by reducing emissions and turbocharging the clean energy industry’s growth.
The analysis measures the costs and benefits of these tax incentives and finds the benefits from reduced carbon emissions alone are roughly 3-4 times greater than the costs. At the same time, the incentives would lead to a 64-73 percent reduction in electric power sector carbon emissions from 2005 levels by 2031.
Key members on tax writing committees in the Senate and House highlighted the findings as further proof of taking immediate climate action:
Senator Ron Wyden, Finance Committee Chair
“The University of Chicago confirms that the economic benefits of incentivizing clean energy far outweigh the costs, increasing economic output by up to $1.8 trillion. This is more than six times the cost of these incentives. Our economic future is inextricably linked to our ability to avoid the worst effects of the climate crisis, as this study shows.
“This massive increase in economic output would also improve our long-term financial picture, generating significantly more revenue. This is a no-brainer, for our economy and climate.”
Representative Richard Neal, Ways & Means Committee Chair
“The green tax provisions in this package make sound economic sense and play a key role in our battle against climate change. This investment will pay tremendous dividends, both literally and in the form of a cleaner, brighter future for our planet. It’s possible to pursue an environmentally sound agenda that also creates jobs and strengthens our economic might – all that’s needed now is the political will to get these provisions to President Biden’s desk.”
Representative Mike Thompson, Chair of the Ways and Means Select Revenue Measures Subcommittee
“Clean electricity tax credits are key to shifting our energy use towards renewable energy, shrinking our carbon footprint, and dramatically reducing greenhouse gas emissions. This report from the University of Chicago and Rhodium clearly shows that investing in clean energy tax credits and incentives like those in my GREEN Act will stimulate our economy and provide three- to four-times the costs in economic benefits. Clean energy is the energy of the future — I am committed to working with Chairman Neal and our partners to accelerate our transition to clean energy and protect our environment for generations to come.”
The findings released today build on previous research from the Rhodium Group showing that Congress can still pass the climate test, and save households $500 annually if Congress preserves federal investments in clean electricity, electrification, and efficiency.
Experts are unequivocal about the Build Back Better Act’s positive economic impact:
- Good-paying jobs in the fastest-growing industry: Clean energy is the fastest-growing industry in America and already supports 3 million jobs that pay 25% higher than the national median wage. The jobs cannot be offshored and many are in rural communities—including 99% of wind energy jobs.
- Business support: A wide range of business leaders have called for passage of the climate provisions in Build Back Better, including Patagonia, Salesforce, Amazon, Meta Platforms, General Motors, Walmart, and Netfllix.
- Anti-inflationary: 17 Nobel-Prize-Winning economists wrote a letter to President Biden saying the Build Back Better Act “Will Ease Longer-Term Inflationary Pressures.” Even noted inflation hawk Larry Summers wrote that Build Back Better would not have a meaningful impact on inflation: “I’m For Build Back Better.”