Clean technology deserves government support

The Oregon Legislature has voted to do away with the Business Energy Tax Credit (“BETC”), replacing it with three smaller credits.

The legislation, House Bill 3672, now goes to Gov. John Kitzhaber for his action.

The BETC offers a major incentive to transition away from older models of energy production, affording a tax credit of up to 50 percent of the cost of renewable energy resource generation. The move to eliminate this legislation is shortsighted and ignores the history of government support for new entrants into the energy industry.

Although they laud the desire to promote green energy, critics of the BETC argue that the burgeoning industry should stand or fall on its own merits. If solar, wind and biomass firms cannot compete in the marketplace against coal, nuclear and hydro power, then they need to go back to the drawing board and create cheaper technology.

This seems like a reasonable argument. It sounds in fair play and the ever-popular notion to “let the market decide.” But here’s the problem: The market is rigged.

Between 2002 and 2008, the federal government spent $72 billion on energy subsidies to support fossil fuels. During this same seven-year stretch, renewable energy received only $29 billion in subsidies.

The disparity looks far worse when one considers that the fossil-fuel industry is an established, market-dominant player that has received massive subsidies and government support for generations.

And the fossil-fuel industry is not the only traditional power sector to benefit from public aid. In the Pacific Northwest, home to some of the cheapest electricity in the nation, the government bankrolled the massive dam infrastructure that supplies the bulk of the region’s power.

Critics of the BETC often forget these inconvenient facts. The truth is that while renewable energy has come a long way in terms of cost and efficiency, it’s still in its infancy. Clean technologies need and deserve support similar to what has aided the conventional fossil-fuel industry.

Perhaps the government should have refrained from involving itself in the energy business to begin with, but that is now a moot point. The barons of fossil fuel, nuclear power and hydroelectricity have benefitted from government subsidies for years. Even if one believes those handouts were a mistake, cutting subsidies to green energy only compounds the error by forcing this infant industry to compete against established powers without the benefit of the public aid that fueled those powers to dominance in the first place.

If we were willing to subsidize industries that have blighted the skies and destroyed salmon runs, do we really want to nickel and dime energy models that don’t pose those threats?

Nick Fromherz of Yamhill is an environmental law and policy scholar for Adelante Mujeres, an Oregon-based non-profit. He is currently working in Cochabamba, Bolivia, and can be reached at nfromherz@hotmail.com.