Building a Clean Energy Economy, Improving Energy Security, and Addressing Climate Change
The President’s Fiscal Year 2014 Budget demonstrates that we can make critical investments to strengthen the middle class, create jobs, and grow the economy while continuing to cut the deficit in a balanced way.
The President believes we must invest in the true engine of America’s economic growth – a rising and thriving middle class. He is focused on addressing three fundamental questions: How do we attract more jobs to our shores? How do we equip our people with the skills needed to do the jobs of the 21st Century? How do we make sure hard work leads to a decent living? The Budget presents the President’s plan to address each of these questions.
To make America once again a magnet for jobs, the Budget invests in high-tech manufacturing and innovation, clean energy, and infrastructure, while cutting red tape to help businesses grow. To give workers the skills they need to compete in the global economy, it invests in education from pre-school to job training. To ensure hard work is rewarded, it raises the minimum wage to $9 an hour so a hard day’s work pays more.
The Budget does all of these things as part of a comprehensive plan that reduces the deficit and puts the Nation on a sound fiscal course. Every new initiative in the plan is fully paid for, so they do not add a single dime to the deficit. The Budget also incorporates the President’s compromise offer to House Speaker Boehner to achieve another $1.8 trillion in deficit reduction in a balanced way. When combined with the deficit reduction already achieved, this will allow us to exceed the goal of $4 trillion in deficit reduction, while growing the economy and strengthening the middle class. By including this compromise proposal in the Budget, the President is demonstrating his willingness to make tough choices and his seriousness about finding common ground to further reduce the deficit.
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The Budget supports a range of investments and initiatives to help make the United States the leader in the clean energy sector and bring about a clean energy economy with new companies and jobs. The Budget also supports work to prepare and strengthen our communities against extreme weather and other impacts of climate change, while cutting the carbon pollution that causes it. Cleaner energy will play a crucial role in meeting the President’s goals of reducing greenhouse gas emissions in the range of 17 percent below 2005 levels by 2020, and enhancing energy security by reducing our dependence on oil. The President is committed to an “all-of-the-above” approach that develops all American energy sources in a safe and responsible way and builds a clean and secure energy future.
These efforts are producing successes around the country. Since 2008:
- the amount of U.S. electricity produced by solar, wind, and geothermal energy has doubled;
- the proportion of U.S. oil imported fell to the lowest level in twenty years;
- the world’s largest wind energy facility was constructed and began producing electricity;
- the price of automotive lithium-ion battery energy storage capacity has dropped by over 40-50%;
- the price of solar modules for electricity production has declined by more than 75%; and
- the productivity (in GDP) of each unit of energy consumed has increased by 8%.
The Budget continues the President’s commitment to keeping the United States on the forefront of clean energy production and deployment. To do this, the Budget builds on past Administration successes by increasing funding for the Department of Energy’s (DOE) clean energy technology activities by more than 40 percent above the 2012 enacted level, to $6.2 billion, and increasing funding for clean energy technology across all agencies by 30 percent, to approximately $7.9 billion.
INVESTS IN CLEAN ENERGY RESEARCH AND DEVELOPMENT
The Budget continues to place a priority on funding to accelerate R&D and further increase the cost-competitiveness and deployment of renewable power, electric vehicles, next-generation biofuels, advanced energy-efficient manufacturing, and energy efficiency in homes and commercial buildings. Within DOE, the Budget:
Provides $615 million to increase the use and reduce the costs of clean renewable power from solar, wind, geothermal, and water energy;
Increases the affordability and convenience of advanced vehicles and domestic renewable fuels by investing $575 million in cutting-edge vehicle technologies and $282 million in the next generation of advanced biofuels;
Invests $365 million in advanced manufacturing research and development and combined heat and power technologies to strengthen U.S. competitiveness, increase industries’ energy efficiency, and enable companies to improve product quality and manufacturing processes while cutting production costs by using less energy;
Supports modernizing the electricity delivery grid through an investment of $153 million in Smart Grid R&D and other activities (including cybersecurity for energy control systems) and provides $80 million to advance clean energy integration into the grid;
Provides $45 million to support an interagency research program to identify and reduce, mitigate or eliminate environmental hazards of hydraulic fracturing for hydrocarbon production;
Invests $375 million in cleaner energy from fossil fuels like clean coal, including a $25 million incentive for the first, natural gas combined cycle power plant to integrate carbon capture and storage;
Increases support to $379 million in 2014 for the Department of Energy’s Advanced Research Projects Agency– Energy to support potentially transformative energy research; and
- Provides $300 million for research and development on innovative building efficiency technologies and the ongoing introduction and enforcement of appliance efficiency standards that save consumers and companies money while improving performance.
The Budget also proposes $255 million to support research, development and deployment of clean energy technologies through various programs across eight agencies at the Department of Agriculture (USDA). Within USDA, the Budget:
Supports clean energy deployment with $4 billion in loans to rural electric cooperatives and utilities that will support the transition to clean-energy generation and $238 million in loan guarantees and grants to assist agricultural producers and rural small businesses in developing renewable energy systems and energy efficiency improvements.
Invests $383 million in competitive peer-reviewed research grants through the Agriculture and Food Research Initiative (AFRI), a portion of which is allocated to bioenergy and climate change projects.
Proposes $26 million for research and development of next-generation renewable energy and high-value biobased products.
Invests $53 million in intramural research initiatives related to environmental programs.
- Proposes $41 million in Forest Service research on climate preparedness and resilience, climate change mitigation, bioenergy and biobased products and $12 million in Forest Service biomass grants, technical assistance and communications.
LAUNCHES NEW POLICY INITIATIVES TO ADVANCE CLEAN ENERGY AND ENERGY SECURITY GOALS
In addition to ongoing and expanded efforts, the Budget adds new policy initiatives which will advance clean energy and energy security goals:
Sets a New Goal to Double American Energy Productivity by 2030. The President has set a new goal to cut in half the energy wasted by America’s homes and businesses, with action aimed at doubling the economic output per unit of energy consumed in the United States by 2030, relative to 2010 levels.
Challenges States to Cut Energy Waste and Support Energy Efficiency and Modernize the Grid. Modeled after a successful Administration approach in education reform designed to promote forward-leaning policies at the State level, the Budget includes $200 million in one-time funding for Race to the Top performance-based awards to support State governments that implement effective policies to cut energy waste and modernize the grid.
Reduces Defense Department Energy Consumption. The Department of Defense (DOD) consumes almost three-fourths of all energy used by the Federal Government. Consuming that much energy—whether fuel for planes, ships, and tanks, or electricity for bases, commissaries, and schools—has budgetary and strategic impacts. DOD seeks to be more deliberate about how it uses energy by improving the fuel efficiency of existing equipment, developing and fielding innovative energy technologies, expanding renewable and low carbon energy sources and improving the energy efficiency of buildings. The Budget includes more than $3 billion for operational and facility energy conservation investments by DOD.
Invests in Advanced Energy-Efficient Production Technologies to Strengthen Domestic Manufacturing. The Budget provides DOE with $365 million to develop innovative manufacturing processes, advanced industrial materials, and combined heat and power technologies to increase industries’ energy efficiency and to help ensure that the technologies developed here are also manufactured here. This funding includes support for approximately three Manufacturing Innovation Institutes focused on energy and efficiency technologies, which will leverage investments from universities, companies, and the Government to create and deploy new manufacturing capabilities, products, and processes that can impact large-scale commercial production.
Sets a Goal to Cut Our Net Oil Imports in Half by the End of the Decade. Increased production of domestic oil and biofuels, and improvements in the fuel efficiency of our cars and trucks, allowed the United States to cut imports of oil by almost one-third since 2008. To build on this progress, the President will propose new policies and investments to set us on a course to cut imports of foreign oil in half by the end of the decade, relative to 2008 levels.
Establishes Energy Security Trust with Revenues from Federal Oil and Gas Development. While the United States will continue to rely on responsibly produced oil and natural gas, the President is committed to a long-term policy that allows us to transition to cleaner energy sources. The Budget establishes an Energy Security Trust to help fund research efforts that would help to shift our cars and trucks off oil. This $2 billion investment over 10 years will support research into a range of cost-effective advanced transportation technologies and will be funded by revenue generated from Federal oil and gas development in Federal waters.
Makes Public Lands Available for Clean Energy Infrastructure Projects. To enhance energy security and create clean energy jobs in new industries, the Budget proposes key funding increases for DOI renewable energy development activities and related transmission infrastructure including $100 million to maintain capacity to review and permit new renewable energy projects on Federal lands and waters.
Commits to Safer Production of and Cleaner Electricity from Natural Gas. Our domestic natural gas resources are reducing energy costs across the economy—from manufacturers investing in new facilities to families seeing heating costs drop. The Budget invests in research to ensure safe and responsible natural gas production and promote the development of the first, natural gas combined cycle power plant to integrate carbon capture and storage.
Implements Responsible Nuclear Waste Strategy. Under the President’s direction, the Department of Energy created a Blue Ribbon Commission on America’s Nuclear Future to recommend how to manage the challenges associated with the back end of the nuclear fuel cycle. The Administration has issued a report in response to the recommendations and looks forward to working with the Congress on implementing policies that ensure that nuclear power can continue to be part of our energy mix.
Provides a Permanent Tax Incentive for Renewable Energy Production and Energy Efficiency and Tax Credits for Advanced Energy Manufacturing. The Budget includes $23 billion of incentives for renewable energy production and energy efficiency over the next 10 years. To provide a strong, consistent incentive to encourage investments in renewable energy technologies and to help meet our goal to double generation from wind, solar, and geothermal sources by 2020, the Budget would make permanent the tax credit for the production of renewable electricity. The Budget makes the Production Tax Credit refundable so new, growing firms can benefit and provide renewable electricity generation. The Budget would also reform and make permanent the deduction for energy efficient commercial property. The Budget also proposes an additional $2.5 billion in credits, for investments in advanced energy manufacturing projects, such as energy equipment and facilities for clean energy manufacturing. Combined with similar credits provided through the successful Recovery Act program, this will bring total clean energy manufacturing credits thereby increasing the amount of credits certified by the Department of the Treasury to $4.8 billion.
Cuts energy bills for low-income families. As part of an overall investment in weatherization related activities, the Budget includes $184 million for the DOE Weatherization Assistance Program, which enables low-income families to permanently reduce their energy bills by making their homes more energy efficient. Families receiving weatherization services see their annual energy bills reduced by about $250 to $450 per year in heating, cooling, and electric costs, depending on their housing type, location, and fuel source.
Continues Support for Responsible Development of Federal Oil and Gas Resources. The Budget also provides robust support for onshore energy permitting and oversight on Federal lands, with more than a 20 percent increase in discretionary funding for the oil and gas program of the Bureau of Land Management (BLM).
Eliminates Unnecessary Fossil Fuel Subsidies. The Budget proposes to eliminate inefficient fossil fuel subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change. The Budget would repeal over $4 billion per year in tax subsidies to oil, gas, and other fossil fuel producers.
Reduces Carbon Pollution Through Cleaner, More Efficient Use of Energy. In addition to investing in clean energy technologies that will cut greenhouse gas emissions, the Administration is pursuing cost-effective, commonsense approaches to control carbon pollution. For example, in 2014, the Environmental Protection Agency (EPA) will continue to work with the Department of Transportation to implement a national program of fuel economy and greenhouse gas standards to reduce GHGs from new light-duty and heavy-duty vehicles. The fuel economy and greenhouse gas standards for light duty vehicles alone will save approximately 12 billion barrels of oil and prevent 6 billion metric tons of GHG emissions over the lifetimes of the vehicles sold through model year 2025.
Strengthens International Efforts to Tackle Climate Change. The Administration has led efforts in the international climate negotiations that have yielded, among other things, the first set of national greenhouse gas reduction commitments by all of the major developed and developing countries alike, the most robust transparency system to date, and historic global efforts in support of climate resiliency. At the same time, we have worked to advance climate and clean energy efforts through a range of international initiatives, including launching the Major Economies Forum on Energy and Climate, the Clean Energy Ministerial, and the Climate and Clean Air Coalition to Reduce Short-Lived Climate Pollutants.
ENHANCES PREPAREDNESS FOR CLIMATE CHANGE
Even as we work to reduce the severity of climate change by cutting carbon pollution, we must also improve our ability to manage the climate impacts that are already affecting American communities. Enhancing the Nation’s resilience by preparing for increasingly extreme weather and other unavoidable consequences of climate change will save lives and help to secure long-term American prosperity. To that end, the President is committed to building stronger, safer communities, ensuring the long-term resilience of the Nation’s infrastructure and and to protecting critical natural resources in the face of climate change. The Budget would support the following efforts:
Safeguards Federal Investments, Ensures Delivery of Federal Services and Protects Critical Resources in the Face of Climate Change. The Budget will support Federal agency implementation of their first-ever climate change adaptation plans, which are helping agencies, under existing authorities and missions, better protect taxpayer investments and safeguard the health and safety of communities, businesses, infrastructure, and ecosystems in the face of extreme weather and other impacts of climate change. Agencies will also work with State, Tribal, and local partners to implement recently developed joint strategies to respond to the impacts of climate change in cross-cutting sectors, such as freshwater management and fish, wildlife and plants. The Administration is also working to incorporate climate change considerations into the design and repair of critical infrastructure to ensure its long-term viability.
Supports Local Efforts to Build Climate Preparedness and Resilience. The Administration will also encourage and accelerate efforts by local communities to prepare for extreme weather and other impacts of climate change. Actions include supporting community resilience planning and working across agencies to provide local decision-makers with actionable information on observed and projected changes in extreme events and other impacts of climate change. Through the Transportation Leadership Awards program, the Budget includes $200 million for “Climate Ready Infrastructure” that build enhanced preparedness to extreme weather and other impacts of climate change in their planning efforts, and that have proposed or are ready to break ground on infrastructure projects to improve resilience. These investments will support a broader Administration commitment to help communities become more resilient through direct technical assistance, provision of useful data and tools on projected impacts, and support for planning.
Improves Understanding of Climate Impacts and Makes this Information Accessible. The Budget funds new investments in actionable science on climate change impacts and the development of technical resources, data, and tools for communities. The Budget provides $2.7 billion for thirteen Federal agencies in the U.S. Global Change Research Program to support research to improve our ability to understand, predict, mitigate, adapt to climate change, and increase communication among scientific and stakeholder communities. Building on supplemental funding provided to East Coast communities impacted by Hurricane Sandy, agencies will help communities prepare for and respond to coastal storms, sea level rise, drought, and other climate-related hazards by providing data, information, and services, as well as risk assessment tools. These investments can reduce community vulnerability to storms and significantly reduce recovery costs.