Friday, December 08, 2006

Sunsetting wind power program spells opportunity for major emission reductions in Canada
In previous posts I have suggested extending the Wind Power Production Incentive (WPPI) to include other low- and non-emitting forms of electricity generation, including nuclear and coal gasification. But now I wonder if instead of a subsidy like the WPPI, a tax credit might be a more effective way of spurring investment. A tax credit would certainly be more palatable to the current federal government.


In terms of politics, framing this tax credit in a way that emphasizes that it is for clean electricity—including wind—would take some of the edge away from the fact that its chief beneficiaries would surely be nuclear and coal generators. In this way it might soften the criticism from the anti-nuclear, anti-coal crowd. As I have said, putting wind at the forefront of a government incentive program would be smart optics: windmills would provide gigantic physical evidence of our commitment to reducing emissions.

And if we take a good look at the very recent tax credit selection process in the U.S. (see the DOE’s press release, as well as recent posts in the Gasification and IGCC Forum), we could avoid some of the glitches that have muddied the debate in that country over whether gasification is still uneconomical.

To qualify for the WPPI, a project must be commissioned before this coming March. Does this mean the WPPI will sunset in March? If so, all the more reason to replace it with something more wide-ranging. The Kyoto debate will continue to rage between now and then, with the Conservatives working hard to come up with a workable and palatable plan to reduce industrial emissions. A move like this could bring the opposition into agreement.

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