Environmental Law & Policy

Take advantage of state and federal green living tax incentives

There has never been a better time than now to tap into a laundry list of tax rebates and other financial incentives designed to encourage individuals and businesses to go the greener mile. At the federal level in the U.S., individuals can reap the rewards of no less than eight different financial incentives ranging from tax credits and home loans for replacing windows and installing insulation around the house to tax rebates for purchasing a hybrid car or hooking up a solar hot water heater.

Besides these federal incentives, nearly every U.S. state has additional state or local incentives available. Many require utilities to rebate consumers who save electricity. Some utilities even offer “net metering,” whereby consumers who generate some of their power through rooftop solar panels or other technologies can sell electricity back to the utility, thus reducing or zeroing out their electric bill—even earning money.

Green Living Tax Incentives for Business

Many financial incentives are in place for businesses, as well.

At the federal level, examples include an energy-efficient commercial buildings tax deduction, a business energy reduction tax credit, an energy-efficient appliance tax credit for manufacturers, and a new energy-efficient tax credit for green-savvy builders.

At the state level, many are eager to attract renewable energy companies to their region, and offer tax breaks to get them there. Washington State, for example, charges no sales tax on renewable energy equipment produced or sold there. And some forward-thinking cities are beginning to offer “density bonuses” and green building incentives to developers and builders to encourage sustainable land use.

Find Information About Green Living Tax Incentives

The best place to look for what’s available is to steer your web browser to the free online Database of State Incentives for Renewables and Efficiency (DSIRE), a comprehensive source of information on state, local, utility and federal incentives that promote renewable energy and energy efficiency. DSIRE is a federally funded project of the Interstate Renewable Energy Council, whose membership includes state and local government agencies, national laboratories, renewable energy companies and advocacy groups

In Canada, the Office of Energy Efficiency at Natural Resources Canada offers a slate of federal grants and incentives under its ecoENERGY Retrofit program to homeowners, businesses, large industries and public institutions to help them invest in energy- and pollution-saving upgrades. The agency also administers the High Efficiency Home Heating System Cost Relief program, which will contribute up to $300 to homeowners who upgrade their old oil or gas furnace or boiler to a new high-efficiency model. And low-income households might qualify for additional federal financial assistance for energy retrofits. Another Canadian program, the Vehicle Efficiency Incentive (VEI) rewards those who buy fuel-efficient cars or trucks with rebates of up to $2,000 each. Beyond these federal programs, selected provincial and municipal entities across Canada also offer incentives to those looking to save energy and the environment.

Supreme Court decides carbon dioxide is a pollutant under the Clean Air Act

In what may prove to be an historic turning point in the fight to reduce global warming, the U.S. Supreme Court today handed down a decision in a landmark environmental case—the first ever involving global warming—that is being hailed as a victory for the environment and a setback for the Bush administration.

In a 5-4 decision, the court ruled that carbon dioxide is a pollutant under the Clean Air Act and that the U.S. Environmental Protection Agency has the authority to regulate carbon dioxide emissions from automobiles and other vehicles.

"Today’s ruling is a watershed moment in the fight against global warming," said Carl Pope, Sierra Club Executive Director. "The ruling is a total rejection of the Bush administration’s refusal to use its existing authority to meet the challenge posed by global warming.

It also sends a clear signal to the markets that the future lies not in the dirty, outdated technologies of yesterday, but in the clean energy solutions that will fuel the economy of tomorrow.

Court Rejects Claim that EPA Lacks Authority to Regulate Vehicle Emissions

During the Bush Administration, the EPA has argued that it has no authority to regulate so-called “tailpipe emissions” of carbon dioxide and other greenhouse gases that contribute to global warming, because they are “non-point” emission sources that are not fixed geographically, unlike coal-fired power plants that are “point” sources and closely regulated. Vehicles account for about 20 percent of U.S. carbon dioxide emissions, while power plants account for about 40 percent.

The Essence of the Case

The case, Massachusetts vs. EPA, put three questions before the court:

 

• Do states have the right to sue the EPA to challenge its decision?

• Does the Clean Air Act give EPA the authority to regulate tailpipe emissions of greenhouse gases?

• Does EPA have the discretion not to regulate those emissions?

The court answered yes to the first two questions. On the third question, the court stopped short of requiring the EPA to regulate carbon dioxide emissions. Instead, the court ordered the agency to re-evaluate its position that it has no obligation to regulate vehicle tailpipe emissions of greenhouse gases and is free to exercise its discretion to leave the problem unaddressed.

The majority, led by Justice John Paul Stevens, said the EPA had offered a “laundry list” of reasons for failing to regulate carbon dioxide emissions and told the agency that its rationale must be grounded in the Clean Air Act if it wants to continue arguing that it should not be required to regulate carbon dioxide and other greenhouse gases.

"EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change," Stevens said in the majority opinion. Joining Stevens in the majority were Justices Stephen Breyer, Ruth Bader Ginsburg, David Souter and Anthony Kennedy, who is often considered the swing vote on the court.

Chief Justice John Roberts and the court’s three other conservative justices—Samuel Alito, Antonin Scalia and Clarence Thomas—dissented and made up the minority in the decision. The four dissenting justices based their dissent on the question of whether the states had the right to sue over this issue.

Congress Must Reinforce the Court Decision with Carbon Caps

While hailing the Supreme Court decision as an important victory in the fight to reduce global warming, leading environmentalists also noted that Congress will now have to take up where the court left off.

“It's important to remember the Court did not rule EPA has to take action on climate change, that’s why this is ultimately up to Congress. The Court did all it can, but if we’re really going to fix climate change, Congress has pass a cap on carbon pollution, and soon," said Fred Krupp, president of Environmental Defense.

"EPA pursued a kitchen sink strategy by throwing a variety of arguments at the Court about why it could simply choose to ignore the law and come up with its own political criteria for deciding what is a pollutant and whether or not to regulate it," said David Bookbinder, director of climate litigation for the Sierra Club. "This ruling simply sets into motion the process to establish the kind of regulations for global warming pollutants that have successfully regulated other pollutants for decades without the kind of dire economic effects predicted by industry."

"It’s unfortunate—but not surprising—that it took a Supreme Court case to clarify the meaning of words such as ‘pollutant,’ ‘endanger,’ ‘weather,’ and ‘climate’ for the Bush administration," Bookbinder said. "The only way EPA can continue to refuse to do its job and not regulate global warming pollutants is by claiming that the effects of global warming pose no danger to the public. Bush’s EPA may try do so, but I suspect they’d be laughed out of court."