Title

A Consideration Of The Relative Effectiveness Of Key Energy And Conservation Related Tax Incentives Under U.S. Tax Law

Document Type

Article

Publication Date

1-1-2012

Keywords

Accounting/Taxation; energy; conservation; tax incentives

Disciplines

Taxation

Abstract

This article looks at the relative effectiveness of areas of key energy and conservation related tax incentives provided by major industrialized countries. The article focuses on three different common energy/conservation areas that tended to receive government support: Wind power, general approaches to tax regulation of environment and energy concerns, transportation fringe benefits, and cap and trade policies. The article begins with a comparison of wind power tax incentive schemes used by the five largest wind power producing coutries in the world (United States, Germany, Spain, China and India.) It then catalogs some general incentives by various countries where some are in the form of credits that directly reduce tax liability, while others are deductions or specially allowed tax calculations that increase or accelerate dedictions and thus reduce the level of income subject to taxation. There is also difference in targeting of the tax incentives, as some seek to encourage energy conservation, while others encourage development of new, environmentally friendly energy sources. Yet other tax provisions are negative incentives, which attempt to punish or restrict behavior seen as environmentally unfriendly or wasteful of energy. It goes on to discuss government tax policies that encourage or discourage environmentally friendly transporation methods, and then reviews cap and trade policies in the U.S. vs a number of other major industrialized countries.

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