Bush Offers Tax Breaks For Green Firms

by Leroy Baker, Tax-News.com, New York

18 February 2002

Following the US's rejection last year of the Kyoto treaty, President Bush has unveiled plans for a host of tax incentives designed to encourage American industry, farmers, and individuals to reduce greenhouse gas emissions.

The President refused to commit to a reduction of gas emissions to 1990 levels, as specified in the 2001 treaty, claiming that such an agreement could cost millions of US jobs. Instead, he is seeking, amonst other initiatives, to draw more businesses into a registry of companies which report greenhouse gas emissions to the Government. Companies which subscribe to this scheme are permitted various tax credits, which they can trade with each other in a similar way as they can under the Clean Air Act.

'This new approach will harness the power of markets, the creativity of entrepreneurs, and draw on the best scientific research,' Bush boasted at the National Oceanographic and Atmospheric Administration on Thursday.

However, the registry scheme appears to have been somewhat less than effective so far - only 222 US companies currently register and report their emissions.

Despite the President's apparent confidence in the reporting plan, the Bush administration seems vague on the detail, and reportedly has no firm goal for the number of US companies which it would like to see joining the registry.

President Bush last week announced a number of other tax incentives designed to encourage US corporate and individual taxpayers to go 'green', including tax breaks for farmers who plant carbon dioxide absorbing trees, incentives for consumers to buy hybrid and fuel-cell cars, and tax breaks for companies to reduce methane emmissions from landfill sites.

However, he also revealed that the Government will review the success of the various initiatives in 2012, and could consider the introduction of a new, tougher scheme.

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