The Skywriter

Policy Update 12/07/10: Tax cuts that run deep

7
Dec

Policy Update 12/07/10: Tax cuts that run deep

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Representatives from 194 nations have descended on Cancun, Mexico for this year's U.N. Climate Conference (COP16). Despite a lack of leadership at the international level, the Obama Administration has been moving forward on clean energy on multiple fronts: reining in offshore drilling, calling for renewable energy R&D, and setting strong Clean Air Act regulations for big polluters. Meanwhile, the lame duck U.S. Congress remains consumed with compromising over how to extend the Bush tax cuts set to expire at the end of the year.

Cancun Enters Second Week

The U.N. Climate Change Conference in Cancun is now well underway. Following last year's negotiations in Copenhagen, expectations are low, but progress remains possible on global climate finance and other specific pieces of a yet-to-be-finalized future global deal. Week one included a few rocky moments: Japan threatened to leave the Kyoto protocol, and four U.S. senators voiced public disapproval regarding climate finance.

Some good news came from the International Youth Delegation, who succeeded in pressuring the U.S. and other developed nations into adopting stronger commitments related to climate education. Executive Secretary of the U.N. Framework Convention on Climate Change (UNFCCC) Christiana Figueres, met personally with a group of youth leaders and teared up as she explained how "insufficient" the talks will be in addressing the larger problem of climate change.

Climate finance has emerged as an area where serious progress can be made. A global climate fund is necessary in its own right to help developing countries adapt to the changing climate and invest in clean energy, but it also represents an important political opportunity for keeping the international process afloat. Those who want to see a fair, ambitious and binding global deal are fighting for progress on climate finance in the coming weeks. The Center for American Progress and Alliance for Climate Protection came out with some specific recommendations on climate finance, including how the U.S. should interface with global climate finance from 2012-2020. Oxfam is working to make sure the new climate fund is fair and accessible to communities most vulnerable to climate change.

1Sky Campaign Director Liz Butler discusses President Obama's opportunity to be a global climate leader on Huffington Post

The Obama Administration Steps It Up

Last week the Obama Administration revised their stance on offshore drilling, re-codifying the congressional moratorium on the Atlantic and Eastern Gulf of Mexico (areas that were previously off limits to drilling). See it on a map here.

Oil spill panel wants more reform

The Department of Interior is also considering disclosure requirements for natural gas fracking fluid. Energy Secretary Steven Chu noted publicly that in light of weak federal clean energy policies, the U.S. is falling behind China in terms of its clean energy competitiveness.

At its 40th anniversary, the EPA looks back at its accomplishments and forward to new challenges. Administrator Lisa Jackson looks forward to further progress and is also prepared to defend her strong Clean Air Act enforcement against attacks from powerful opponents in the House.

Lame duck Congress

The big news on the Hill this week is that President Obama will strike a deal with congressional Republicans on the Bush tax cuts: The Democrats will probably extend the tax cuts for the wealthiest Americans for another two years, and in return Republicans will probably support extending unemployment benefits set to expire shortly.

Congressional Democrats in the House and Senate are almost universally opposed to the idea of extending tax cuts for the wealthiest Americans. The two bodies held message votes last week to show opposition to the compromise. The measure passed the House, but fell seven votes shy of the 60 needed to overcome a filibuster in the Senate.

Greg Sargent at the Washington Post defends the White House on tax cuts arguing that congressional Democrats lost their leverage on the issue by not forcing a vote before the election. At the time, Democratic party leaders deferred to vulnerable senators who preferred not to have a fight over taxes in the lead-up to the election.

Congressional Republicans have vowed to filibuster all other bills until the Bush tax cuts are resolved, including the "continuing resolution" (CR) needed to keep the government up and running through December 18th. Other bills on the table before the Lame Duck Congress adjourns include the CR, the New START nuclear arms treaty with Russia, and possibly a repeal of Don't Ask, Don't Tell, and the DREAM Act.

Senator Baucus (D-MT) is floating a tax package that will extend recovery program funds for renewable energy like wind and solar as well as limit funds for corn ethanol.

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