Senate Finance Examines "Technology-Neutral" Energy Policy (reduction of greenhouse gasses)

Senate Finance Examines "Technology-Neutral" Energy Policy

4/23/2009 11:52 AM ET

(RTTNews) - A panel of experts warned lawmakers about the importance of reducing greenhouse gasses Thursday, as the Senate Finance committee examined the role of the tax code in the energy policy. Specifically, they looked into whether or not the government should establish a "technology neutral" incentive structure.

"Technology-neutral" is a government performance standard that would encourage the reduction of greenhouse gasses regardless of the technology used.

The experts testifying were largely in support of the technology neutral structure, although they encouraged working out some of the kinks - including plugging the "black liquor" loophole. A few years ago, Congress modified of the alternative fuels tax credit, which allowed for a 50-cent-a-gallon credit for a range of alternative fuels, including liquefied petroleum gas, compressed natural gas, liquid coal, and biomass-based fuel.

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"Efficiency is best achieved by setting taxes on energy sources that have negative externalities associated with their production or consumption," he explained in prepared testimony. "Similarly technological neutrality is most easily achieved through the use of taxes."

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