The U.S. government has managed to postpone financial calamity for a few months with the passage of a so-called “fiscal cliff” deal. But hidden within the bill was tax credit that was considered dead on arrival – The wind energy production tax credit.
The credit has been in jeopardy since it was first introduced, with Republicans in Washington threatening to kill the tax credit, citing its estimated cost of $12.1 billion over the next decade as too costly. However, the credit breaks down to a mere 2.2 cents per kilowatt hour of wind energy produced in America, making it one of the cheapest subsidies approved for energy projects.
The extension of the credit comes at the perfect time, as the United Nations recently released a report detailing the ways in which climate change could cause financial disasters across the globe.
Among the more dire warnings in the U.N. report is the threat of water scarcity, which could devastate commodity markets, as agriculture would take a massive hit and crops would be decimated. So while the United States might have postponed the drop over the fiscal cliff, the threat of the environmental cliff is very real, and very much in need of addressing.
The wind production credit extension will keep the tax credit alive for the year 2013, and its fate after that remains unclear.
Farron Cousins is the executive editor of The Trial Lawyer Magazine, a contributing writer at DeSmogBlog, and the producer of Ring of Fire. Follow him on Twitter @farronbalanced.