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U.S. Debt Ceiling Deal Will Put the Kibosh on Clean Energy

The debt ceiling deal will slash support for clean tech development in the United States

Submitted by: Francesca Rheannon

Posted: Aug 02, 2011 – 07:36 PM EST

Tags: clean energy, debt, economy, green, sustainability, csr


By Francesca Rheannon

The debt ceiling deal will slash support for clean tech development in the United States. That could cripple the country’s ability to avert environmental catastrophes and cede renewable energy development to other nations.

The hysteria over deficit spending and the nail-biting countdown to renew the debt ceiling provided perfect cover for Republicans in the U.S. Congress who have long sought to choke off environmental and clean development programs.

While the press and nation were looking the other way, provisions in the agreement will decimate support for industries that were poised to hit their stride, as the world wakes up to the accelerating threat of climate change and urgency of reining in greenhouse gas emissions.

It is indeed tragic – for the world and country – this heist of our future has been perpetrated so rashly; few in the Congress voting on the debt ceiling deal even had time to know what it was they were agreeing to. And citizens were left without a hint—until the deal was sealed.

While many of the details remain to be finalized, environmentalists are bracing for the worst. According to Sustainable Business, the initial $1 trillion drop in spending (over 10 years) will “drain” domestic discretionary spending and “funding is likely to be all but erased for renewable energy and energy efficiency grants, renewable energy research, and environmental enforcement.” (Meantime subsidies for fossil fuels will remain untouched.) Another $1.5 trillion in cuts are slated to start in 2013.

And they all come on top of steep cuts to environmental and clean energy programs that were extorted from the Congress during the Republican threat to shut down government earlier this year.

GOP strategist Mike McKenna told Business Green, “These guys are looking at 20 percent real cuts in the next two or three or four years. That’s a big, big hit for an agency to take.”

So what’s likely to be on the chopping block? The Energy Department will take huge hits, with biofuels research and development, fuel cell development and wind power development affected.

The EPA, top target in the sights of House Republicans to eliminate outright, or at least de-fund entirely, will likely see its grants supporting wastewater, drinking water and pollution monitoring programs go. The EPA's Clean Water State Revolving Loan Fund will be a likely target – this, in spite of the fact the summer heat wave hammered infrastructure responsible for carrying drinking water supplies and will threaten water quality as the country is likely to suffer more of the same (or worse) in the future.

It’s a double whammy: slam environmental enforcement to the ground while snatching away the consistent support for clean tech R&D needed to convince investors and entrepreneurs it’s worthwhile to take the risk.

As much as many in the business community (including sustainable business) dislike government regulation, it is a critical spur to clean energy development. That’s because regulation creates a level playing field that ensures responsible corporate actors are not penalized in the marketplace when bad actors cut corners.

And when the cops are on the beat, innovation happens as business put efforts into doing what’s needed to follow the rules. You need to look no further than the revival of fortunes of U.S. car manufacturers when they finally gave up the fight against higher fuel efficiency standards. But this is imperiled when environmental regulations are undone or enforcement eviscerated.

Friends of the Earth energy tax analyst told the New York Times, “I see a point at which we just can't enforce our environmental laws…a point where we end up eliminating programs that are essential, like money for renewable energy development.”

Can the philanthropic world and private investors step up to the plate to cover the gap? Those who plan to attend the SOCAP2011 conference in San Francisco in September will be there to build support for sustainability ventures. But the available capital will be spread thin among many competing needs, only some of which will involve clean energy development and environmental repair. And, without the U.S. government sending a clear signal it’s solidly behind clean energy, the money and development will go elsewhere.

The jobs will go elsewhere, too. The biggest contributor to the current budget deficit isn’t the Republican bugabears of Medicare and Social Security: it was the 2007 mortgage meltdown, which led to the massive bailout of the finance industry and crippling unemployment that withered tax revenues.

Slashing budgets will only increase the debt. And slashing funds to environmental enforcement and clean technology will just mean higher deficits to come. We can’t afford this madness. There’s still time to lobby for the future – our lives depend on it.

About Francesca Rheannon

Francesca is CSRwire's Talkback Managing Editor. An award-winning journalist, Francesca is co-founder of Sea Change Media. She produces the Sea Change Radio’s series, Back to The Future, and co-produces the Interfaith Center of Corporate Responsibility’s podcast, The Arc of Change. Francesca’s work has appeared at, The CRO and E Magazine, and she is a contributing writer for CSRwire. Francesca hosts the nationally syndicated radio show, Writers Voice with Francesca Rheannon.

This commentary is written by a valued member of the CSRwire contributing writers' community and expresses this author's views alone.

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