Knuth, Sarah (2021) 'Rentiers of the low-carbon economy? Renewable energy's extractive fiscal geographies.', Environment and Planning A: Economy and Space .
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.
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|Publisher Web site:||https://doi.org/10.1177/0308518X211062601|
|Publisher statement:||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).|
|Date accepted:||No date available|
|Date deposited:||04 February 2022|
|Date of first online publication:||06 December 2021|
|Date first made open access:||04 February 2022|
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