The wildly unpopular GOP tax bill, which is expected to pass through Congress along party lines imminently, includes a number of provisions that have big ramifications for the climate and the environment. These range from mostly good (preserving solar and wind tax credits) to actually the worst (drilling in the Arctic National Wildlife Refuge).
RL Miller, co-founder of Climate Hawks Vote, told Earther that some of the worst attacks on renewables have been “neutered.” For example, the $7500 tax credit for buying an electric vehicle has been restored.
“But it doesn’t begin to make up for the assault on the environment envisioned in this bill,” she said.
Here’s a look at what’s going on in the bill from a climate and energy perspective.
This might just be the biggest environmental catastrophe in the GOP tax bill. It’s also insanely unpopular, with 70 percent of Americans in opposition, but then that’s par for the course with this bill.
The provision was essentially a deal sweetener for Senator Lisa Murkowski (R-Alaska) who has long coveted drilling in the Arctic wildlife refuge, the country’s largest. Doing so would imperil fragile ecosystems and wildlife, like the Porcupine Caribou herd, which use the area as a calving site. That in turn would impact the food security of Alaska Natives.
Environmental groups are also highly skeptical it will raise the $1 billion Republicans are promising.
“They’re not going to come anywhere close to that,” Alex Taurel, the deputy director for legislative affairs at the League of Conservation Voters, told Earther. “It’s a penny on the dollar compared to the $1.5 trillion tax cut.”
The bill the House passed stripped tax credits for renewable energy. Those credits survived in the Senate bill, and are in the final bill Congress is voting on.
Those credits aren’t permanent—they’ll phase out in 2020 for wind, and 2022 for solar, as planned in a 2015 tax bill. By sticking to that timeline, renewable companies will have time to cut costs and plan for the phase out rather than preparing for the abrupt changes the House bill would’ve wrought.
“We are grateful for the elimination of provisions that would have decimated future renewable energy growth and even penalized past investment in wind and solar power,” Gregory Wetstone, the president of the American Council on Renewable Energy, said in a statement.
The Base Erosion Anti-Abuse Tax (BEAT) is another piece of the renewable energy puzzle in the bill. The tax is designed to keep corporations from reducing their tax liability through overseas payments. The New York Times has a great explanation of how it applies to wind and solar projects:
Many companies building wind and solar farms sell their tax credits to multinational banks and other investors who can use them to lower their own tax burdens. Roughly two-thirds of wind projects and three-fourths of solar projects in the United States are supported by such tax-equity financing. By imposing a minimum tax on multinational investors under certain conditions, the initial Senate bill could have drastically reduced demand for such credits.
The final bill includes language that would still allow investors to offset up to 80 percent of the minimum tax using solar and wind credits, which ensures those credits still remain valuable. But the bill also includes more firms that will now fall under the BEAT, which adds a layer of uncertainty to the market.
Car manufacturers from Chevy to Tesla are also breathing a sigh of relief after it was announced the tax bill would keep the electrical vehicle tax credit. It’s a consumer-side credit worth up to $7,500, with the goal of encouraging more people to buy electric cars.
“Keeping the plug-in vehicle credit in place is the right policy for consumers and for the nation,” Genevieve Cullen, the president of the Electric Drive Transportation Association, said in a statement. “We appreciate the conferees’ support and will continue to work with Congress to advance U.S. competitiveness through electric mobility.”
The House bill included a provision that would’ve taxed graduate students on the tuition waivers they currently receive from universities, dramatically increasing their tax burden. It was, to put it lightly, “truly horrifying” and roundly denounced as elitist and unhealthy for American competitiveness in STEM and other fields. It has also, thankfully, been killed in the final bill.
The tax bill is setup to kick people while they’re down. While people who have lost everything (or close to it) from wildfires and hurricanes this year will be able to write off those losses on taxes, future disaster victims won’t be in the same boat.
The personal casualty loss deduction allows victims to write off losses that are greater than 10 percent of a person’s adjusted gross income. Taxpayers were able to deduct $1.6 billion in losses from natural disasters in 2015.
The House bill canned it entirely, but the Senate bill kept the deduction in place if a federal disaster is declared, which is how the final bill reads. For people who suffer from tornadoes, hurricanes or large fires, that’s (relatively) good news. But smaller fires or weather disasters may slip through the cracks.
There’s a host of other things going on in the tax bill, which clocks in at 1,097 pages with all the notes reconciling the House and Senate versions. It was unveiled on Friday and over the weekend, and senators have copped to not even reading the whole thing before today’s planned vote. That includes Bob Corker (R-Tenn.), who was a no until a timely provision was added that would be a huge windfall for him.
Among casualties lost in the bill, Republicans decided not to renew expired credits for small-scale renewable energy. Senator John Cornyn (R-Texas) also added a sneaky amendment that would benefit pipeline companies, and the 16 members of Congress who have stakes in them. And regardless of any windfalls for renewables, this is far from a progressive bill. In the long-term, it will take money away from the middle and lower class in favor of paying off the rich.
Miller said she’s already thinking of how the bill’s environmental shortcomings could be used against Republicans who vote for it in the midterm elections next year.
“Generally we try to tie climate campaigning to voters’ everyday lives. And this bill gives us a great opportunity to do so. We’re obviously still working on messaging, but I could easily see a message along these lines: ‘The same tax bill that wrecked Obamacare and is taking a bite out of your paycheck has giveaways to Exxon—because Republicans care about Exxon, not you. Time to vote them out!’”