Dr Sarah Knuth sarah.e.knuth@durham.ac.uk
Associate Professor
Rentiers of the low-carbon economy? Renewable energy's extractive fiscal geographies
Knuth, Sarah
Authors
Abstract
Progressive movements today call for transformative state-led investment in renewable energy and other climate infrastructures—in the United States, a vision that confronts inherited legacies of austerity. I argue that a significant obstacle is the neoliberal toolkit through which the US federal government subsidizes renewables, an indirect, highly opaque system of tax credits and incentives. For forty years, tax subsidies have ‘paid’ private financial players to invest in renewables, via allowing them to claim legal tax shelters against their other income. In this political economic analysis, I question, first, how US renewable energy acquired this peculiar form of public finance ‘through the tax code’, unique in the global industry. Second, I explore how the model has shaped US renewables financing, development, and ownership. I center two decisive moments: the California ‘wind rush’ in the 1980s, and the ongoing renewables boom of the last fifteen years. This history articulates financial experiments and tax sheltering scandals of the Reagan Administration with exploitation returned today in more organized (and lucrative) form, as ‘tax equity’ finance. Via tax equity, a handful of major US banks dominate financing for renewables and other politically embattled public goods. They exert a troubling ability to extract rents for their capital, gatekeep what projects get built and by whom, and stall US renewables development altogether. Today, the practice is increasingly strained by these and other problems—growing public costs, private capacity ceilings, and amplification of sectoral crises. Under Biden, it faces probable reform, but may need more comprehensive reimagination.
Citation
Knuth, S. (2023). Rentiers of the low-carbon economy? Renewable energy's extractive fiscal geographies. Environment and Planning A, 55(6), 1548–1564. https://doi.org/10.1177/0308518x211062601
Journal Article Type | Article |
---|---|
Online Publication Date | Dec 6, 2021 |
Publication Date | 2023-09 |
Deposit Date | Feb 4, 2022 |
Publicly Available Date | Feb 4, 2022 |
Journal | Environment and Planning A: Economy and Space |
Print ISSN | 0308-518X |
Electronic ISSN | 1472-3409 |
Publisher | SAGE Publications |
Peer Reviewed | Peer Reviewed |
Volume | 55 |
Issue | 6 |
Pages | 1548–1564 |
DOI | https://doi.org/10.1177/0308518x211062601 |
Public URL | https://durham-repository.worktribe.com/output/1215052 |
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Copyright Statement
OnlineFirst This article is distributed under the terms of the Creative Commons Attribution 4.0 License (https://creativecommons.org/licenses/by/4.0/) which permits any use, reproduction and distribution of the work without further permission provided the original work is attributed as specified on the SAGE and Open Access page (https://us.sagepub.com/en-us/nam/open-access-at-sage).
Published Journal Article
(378 Kb)
PDF
Publisher Licence URL
http://creativecommons.org/licenses/by/4.0/
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