Alliance Applauds Critical Energy Efficiency, Climate Change Push In Clinton Administration's FY2000 Budget Request

Release Date: Monday, February 1, 1999

The Alliance to Save Energy commends the continued push by the Clinton Administration to increase crucial funding for energy-efficiency programs plus its package of climate change tax incentives to reduce carbon emissions in its FY2000 budget request which was released today.

The U.S. Department of Energy (DOE) budget request for energy-efficiency research, development, and deployment programs is $837.5 million, which, if enacted would provide a 21 percent increase over last year's appropriation. The U.S. Environmental Protection Agency (EPA) request for climate programs is $216.4 million, which includes $80.1 million for buildings, the account that funds the Energy Star and Green Lights programs. If the buildings request is fully funded, the Energy Star programs would receive approximately $72 million, which would be an 80 percent increase over the FY99 appropriation. The Energy Star label identifies the most energy-efficient appliances and homes for consumers.

"Administration officials have struck a reasonable balance in their FY2000 request, walking a line between two worlds: the urgency of climate change and what ought to be done for the environment and the economy, versus the world of budget caps and competing priorities," observes Alliance President David M. Nemtzow.

DOE energy-efficiency programs have been widely looked to as a source for technology that will combat global climate change by reducing energy consumption in the transportation, buildings, and industrial sectors. These programs were severely cut in 1996, but have begun to rebound through growing Congressional support. Still, even for EPA programs such as Energy Star that were spared debilitating cuts, the lack of increases have hindered the programs from reaching many of their initial goals.

"The Administration has done a good job at steadily increasing research and development efforts on energy efficiency," says Alliance chairman Senator Jeff Bingaman (D-NM). "Though it may not be the improvement that some would like, the progress should be commended."

Some key Alliance priorities are slated for sharp increases in the FY2000 DOE budget request. The Administration budgeted $6 million for the Energy Star Appliance Program at DOE, which is an increase of 120 percent over the FY99 appropriation. The Federal Energy Management Program (FEMP), which supervises the reduction of energy use in the federal government, would get an $8.1 million increase, a 34 percent jump over last year's appropriation.

Nemtzow praises the Climate Change Technology Initiative, a collection of incentives for the use of energy-efficient technology, including tax credits for new homes, building equipment, automobiles, and industrial cogeneration. "This initiative will help educate the public about the direct connections between energy production and use, pollution, and climate change, while giving the benefit of a tax cut to the most energy-conscious consumers," notes Nemtzow.

While strongly supporting the package, the Alliance pledges to work to further modify the new homes provision in the proposal which is still too difficult for most builders to attain. That provision, which in last year's version required homes to exceed the 1993 Model Energy Code by 50 percent to qualify for the credit, has been enlarged to provide smaller-value credits for houses that beat the 1998 International Energy Conservation Code by 30 and 40 percent. In addition, the revenue outlay for the new homes credit is significantly increased from $220 million to $400 million over 5 years.

Alliance Policy Director David Hamilton cites the bill introduced last session by Rep. William Thomas (R-CA), which is being revised and slated for reintroduction, as a plan that could more effectively improve the energy efficiency of the new housing stock. "If you don't get the attention of builders because the bar is too high, there aren't going to be efficient houses out there to purchase."

"We are pleased that the Clinton Administration is strengthening its home energy tax credit package to make it more accessible to builders," says Tammy Eddy, Director of Energy and Environment for the National Association of Home Builders. "However, there is still a gap between that proposal and one that would be most advantageous for consumers and for energy savings."

The Administration request is usually viewed as an opening salvo in the budget battle, but Alliance policy experts are optimistic that the gap is narrowing between Congress and the Administration on energy efficiency.

Last year, DOE energy-efficiency programs finished the budget process with a 13 percent increase over the previous year, primarily because the Administration elevated energy efficiency as a top priority in negotiations over the budget in October, which resulted in a $40 million increase for energy efficiency. Also, a challenge on the House floor by former Representatives David Skaggs (D-CO) and Jon Fox (R-PA) resulted in an additional $45 million for the programs.

Although increases slated for the EPA climate programs in the Senate were wiped out in conference last year, Hamilton suggests that EPA programs may benefit from the ascension of Rep. Jim Walsh (R-NY), a supporter of energy efficiency, to the chairmanship of the House VA-HUD and Independent Agencies Subcommittee of Appropriations.