The national climate change program enacted by President Barack Obama last month, including billions of dollars in new subsidies for solar-wind power and bio-energy, might have little effect on reducing greenhouse gases, the National Research Council warned.
"The energy sector is full of complex regulations and taxes, and when you put them together, they act in counter-intuitive ways," said William D. Nordhaus, professor of economics at Yale University and chairman of the study committee. "I was surprised by a number of them myself."
The two year and $2 million examination was the first study of its kind to probe the relationship between U.S. tax provisions and the actual reduction of greenhouse gases. A 12-member board of National Academy of Sciences economists, energy experts, environmentalists, tax experts and climate scientists carried out the study.
The study examined subsidies and other incentives in the U.S. federal tax code from the last few years pertaining to climate change initiatives. It concluded that less than 1 percent of U.S. emissions are effected by such incentives, despite their substantial cost.
Popular VideoThis young teenage singer was shocked when Keith Urban invited her on stage at his concert. A few moments later, he made her wildest dreams come true.
In the past two years, the United States spent $48 billion in subsidies and credits for greenhouse gas reduction alone. According to the Institute for Energy Research, $32 billion was spent over the past four years on wind, solar and bio-fuels though they make up only 3 percent of U.S. electrical power generation.
Some incentives were even counterproductive, like the tax credits for bio-fuels, which lowered the cost of motor fuel and offset any reduction of greenhouse gas reduction.
The president is expected to call for greater subsidies in the future.