October 4, 2008 – Vol.13 No.28
BAILOUT GENERATES ENERGY INCENTIVES.
So, President Bush has signed a bailout for Wall Street that’s only $73 billion less than the annual Gross Domestic Product (GDP) of Australia.
With the $700 billion bailout, and others such as the $200 billion for mortgage giants Fannie Mae and Freddie Mac, the US national debt stands at $10.1 trillion, but giving themselves some wiggle room for increasing the debt even further, Congress has raised the borrowing limit to $11.3 trillion from $10.6 trillion. The current debt (that $10.1 trillion) represents about 70 percent of our overall economy and amounts to $33,500 for every man, woman and child in the country.
I’ll just write the Feds a check this afternoon and be off the hook for my share.
All of this has nothing to do about energy, of course, but the bill just signed includes many pot-sweeteners needed to entice enough signers and many of those are aimed at helping out the world of efficient and renewable energy.
It will take quite a while to decipher and define all that’s included in the bill but here’s a list of titles of sections of the legislation to give you an idea of what’s included green-energy-wise in the Energy Improvement And Extension Act of 2008:
--- Renewable energy credit.
--- Production credit for electricity produced from marine renewables.
--- Energy credit for small wind property.
--- Energy credit for geothermal heat pump systems.
--- Credit for residential energy efficient property.
--- New clean renewable energy bonds.
--- Tax credit for carbon dioxide sequestration.
--- Carbon audit of the tax code.
--- Inclusion of cellulosic biofuel in bonus depreciation for biomass ethanol plant property.
--- Credits for biodiesel and renewable diesel.
--- Extension and modification of alternative fuel credit.
--- Credit for new qualified plug-in electric drive motor vehicles.
--- Alternative fuel vehicle refueling property credit.
--- Certain income and gains relating to alcohol fuels and mixtures, biodiesel fuels and mixtures, and alternative fuels and mixtures treated as qualifying income for publicly traded partnerships.
--- Transportation fringe benefit to bicycle commuters.
--- Qualified energy conservation bonds.
--- Credit for nonbusiness energy property.
--- Energy efficient commercial buildings deduction.
--- New energy efficient home credit.
--- Modifications of energy efficient appliance credit for appliances produced after 2007.
--- Accelerated recovery period for depreciation of smart meters and smart grid systems.
--- Qualified green building and sustainable design projects.
--- Special depreciation allowance for certain reuse and recycling property.
In good times all this would mean quite a lot; it appears as though there’s enough in the bill to give a real shot in the arm for all things green energy, except for one not insignificant detail. Nearly every provision above requires spending money. With the economy in tanking mode consumers and businesses might be more inclined to keep their money under the mattress and certainly not willing to borrow money even if someone were willing to lend it to them.
Come January there will be a new occupant in the White House, and most likely of a different party. He’ll have to hit the ground running, as they say. Fortunately, if he has to build a new industry to create jobs he will be able to do so upon the foundation in wind, solar, energy efficiency, and host green sectors that have already been poured. The outlook for all things green looks bright, if the financial sector can keep from falling off a cliff.
President Herbert Hoover said about 80 years ago: "Blessed are the young, for they shall inherit the national debt."
All of those kids playing in the alley as I write this are each now $33,500 in debt. And life is just beginning for them.
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