The House Ways & Means Committee holds a hearing today on Energy Tax Incentives Driving the Green Job Economy:

The hearing will examine the effectiveness of current energy tax policy and identify additional steps that the Committee can take to ensure continued job growth in this area while at the same time advancing national energy policy focus on a discussion of current and proposed energy tax incentives.

Panel #1:

• Michael Mundaca (Assistant Secretary of the Treasury for Tax Policy)
• Matt Rogers (Senior Adviser to the Secretary of Energy)

Panel #2:

• T. Boone Pickens (Chairman, BP Capital, Dallas, TX)
• Victor Abate (Vice President of Renewables, General Electric, Schenectady, NY)
• Jeffrey Sachs (Director, The Earth Institute, Columbia University)
• Joseph Romm (Senior Fellow, Center for American Progress)
• Karen Harbert (President & CEO, Institute for 21st Century Energy, U.S. Chamber of Commerce)

Panel #3:

• Stephanie Burns (Chairwoman, President & CEO, Dow Corning, Midland, MI)
• Reed Hundt (CEO, Coalition for Green Capital)
• Rod Dole (Auditor, County of Sonoma, Santa Rosa, CA)
• Mark Bolinger (Research Scientist, National Laboratory, Berkeley, CA)
• David Bohigian (Managing Partner, E2 Capital Partners)

In connection with the hearing, the Joint Committee on Taxation has released Present Law Energy-Related Tax Provisions and Proposed Modifications Contained in the President’s Fiscal Year 2011 Budget (JCX-23-10):

Part 1 of this document … includes summary tables listing current energy-related tax provisions.

Part II of this document provides a fuller description of present law relating to these provisions. The various tax benefits create incentives that have the potential to affect economic decisions and allocate economic resources from other uses to the tax-favored uses. Such tax preferences may produce an allocation of resources that is more efficient for society at large if they are properly designed to overcome negative effects (such as atmospheric pollution, for example) that would otherwise result from a purely market based outcome without any government intervention. The extensive variety of tax expenditures for energy production and conservation have been criticized for lacking well defined objectives, and for lacking coordination among provisions having similar objectives. Some argue that the simultaneous existence of tax preferences for the fossil fuel industry and for renewable energy production represents an incoherent government policy. Others have noted that the incentives for renewable energy and conservation are not themselves designed in a coordinated way to produce the most efficient or equitable subsidies for renewable energy and conservation.

Part III of this document provides a brief discussion of the economic rationale for certain government intervention in energy markets through the tax code, and issues related to the proper design of such tax preferences. It also describes and analyzes the energy-related revenue proposals contained in the President’s fiscal year 2011 budget.