"The greatest environmental challenge of the new century is global warming ... If we fail to reduce the emission of greenhouse gases, deadly heat waves and droughts will become more frequent, coastal areas will flood, and economies will be disrupted. That is going to happen, unless we act. Many people ... still believe you cannot cut greenhouse gas emissions without slowing economic growth. In the Industrial Age that may well have been true. But in this digital economy, it is not true anymore. New technologies make it possible to cut harmful emissions and provide even more growth."

-- President Bill Clinton,
State of the Union Address,
January 27, 2000

Meeting the Challenge of Global Warming. Against a backdrop of growing scientific consensus that the Earth is warming -- and that human activities are at least partly to blame -- President Clinton's FY 2001 budget is proposing over $2.4 billion (a more than 40 percent increase over FY 2000 enacted levels) in funding to combat global climate change. This includes a series of new initiatives, such as accelerated efforts to develop clean energy sources both at home and abroad and a new Clean Air Partnership Fund to boost state and local efforts to reduce greenhouse gases and air pollution, as well as a five-year package of tax incentives to spur clean energy technologies and increased investment for R&D in energy efficient technology and renewable energy. In addition, the President is proposing more than $1.7 billion for global change research, for a total package for FY 2001 of over $4 billion.

International Clean Energy Initiative. To help accelerate the development and deployment of clean energy technologies around the world, President Clinton is proposing $200 million this year (more than a 100 percent increase over FY 2000 enacted levels) for a multi-agency initiative to encourage open competitive markets; remove market barriers in developing countries to clean energy technologies; and to provide new incentives for clean energy technology innovation and export. The initiative will promote U.S. clean energy exports, create high-value jobs, and assist developing countries in fighting air pollution and climate change.

Bioenergy & Bio-based Products Initiative. The budget includes $289 million to accelerate the development of bio-based technologies, which convert crops, trees and other "biomass" into a vast array of fuels and products - an increase of $93 million over FY 2000 enacted levels. In addition to helping meet environmental challenges like global warming, this initiative will increase the viability of alternative energy sources, support farm incomes, and diversify and strengthen the rural economy.

Clean Air Partnership Fund. The President proposes $85 million for a new fund to provide grants to state and local governments for projects that reduce greenhouse gases and pollutants like soot, smog, and air toxics.

Climate Change Technology Initiative (CCTI). The CCTI is a package of targeted tax incentives and investments aimed at increasing energy efficiency and spurring the broader use of renewable energy. The package will save consumers money and reduce greenhouse gas emissions at the same time. CCTI investments have risen substantially each of the past two years. The President's new budget proposes a still more accelerated effort.

$4.0 billion in Tax Incentives over 5 years. The proposed package contains $4.0 billion over five years in tax cuts ($201 million for FY 2001) for consumers who purchase energy efficient products and for producers of energy from renewable sources. This year's CCTI tax package is $400 million more than last year's proposed five-year package. Highlights include:

• Tax credits for energy efficient homes. Consumers can receive a $1000-2000 credit toward the purchase of a new energy efficient home; a 20 percent tax credit for the purchase of selected energy efficient products for homes and buildings; and a $1000-2000 credit for installing a solar energy system.
• Tax credits for fuel-efficient cars. The package extends the current tax credit (up to $4000) through 2006 for qualified electric and fuel cell vehicles and also includes a tax credit of $500-3000 for the purchase of a qualifying hybrid vehicle from 2003-2006.
• Tax credits for clean energy. The package extends the 1.5 cent per kilowatt hour tax credit for the production of electricity from wind and closed-loop biomass; provides credits for open-loop biomass facilities and coal-biomass cofiring; and provides credits for electricity produced from methane from certain landfills.

$1.4 billion for Energy Efficiency & Renewables. The proposed package contains over $1.4 billion in FY 2001 to research, develop, and deploy clean technologies for the four major carbon-emitting sectors of the economy -- buildings, transportation, industry, and electricity -- a 30 percent increase over the amount appropriated in FY 2000. Highlights include:

• Partnership for a New Generation of Vehicles. PNGV is a government-industry effort to develop comfortable, affordable cars that meet all applicable safety and environmental standards and get up to three times the fuel efficiency of today's cars. The combined proposal for PNGV in the FY 2001 budget is $255 million, an increase of $30 million over FY 2000 enacted levels.
• Partnership for Advancing Technology in Housing. PATH is a government-industry partnership to improve the energy efficiency of new homes by more than 50 percent and to retrofit 15 million existing homes to make them 30 percent more energy efficient within a decade. The FY 2001 budget request for building efficiency efforts, such as PATH, Energy Star, and Building America, totals $275 million, a 42 percent increase over FY 2000 appropriations.
• Renewable Energy. The President proposes $410 million for the Department of Energy's solar and renewable energy programs, a 32 percent increase over the amount appropriated in FY 2000. The package includes expanded efforts in key renewable technologies, such as wind, bioenergy, photovoltaics, and geothermal energy.

Cleaner Fossil Fuels. The budget request contains $233 million for R&D;to develop next-generation technologies for coal combustion with much higher energy efficiency and lower greenhouse gas emissions.

Weatherization & State Energy Grants. The budget request includes $191 million -- a $22 million increase over FY 2000 appropriations -- to deliver energy conservation services to low-income Americans and to assist state energy offices in addressing their energy priorities.

U.S. Global Change Research Program. The FY 2001 request includes over $1.7 billion for scientific research to improve our understanding of human and natural forces that influence the Earth's climate system and to assess the likely consequences of global warming. ###

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