It’s a new year and with a new year comes new battles to fight over climate change. Environmental advocates were handed a temporary victory in the climate fight as part of the fiscal cliff deal reached in Congress yesterday. The Production Tax Credit for wind energy, one of the key pieces of public policy behind the massive surge in wind energy over the last few years, was extended for another year.
This is certainly a major victory for renewable energy sources, but it is far from the decisive renewal that could have been. As you may recall, investment in wind energy significantly declined in the months leading up to the end of the year as uncertainty over the fate of the production credit became less and less certain. The one year extension will, without a doubt, help incentivize energy producers to continue to invest in wind energy; however, the short term nature of the extension could be in danger if either Congress takes up comprehensive tax reform or in the pending further negotiations over the national debt.
With any luck, we will see something resembling comprehensive climate legislation in the New Year, but either way we can breath a small sigh of relief for now as the production tax credit has been granted a temporary victory.
Image Courtesy of California Energy Comission.