Chapter Title: Investment in Energy Infrastructure and the Tax Code

a cap and trade system to reduce greenhouse gas emissions—nearly 80% of which are associated with energy production or consumption—and implement a new mandate for renewable electricity with 20 % to be provided by renewable sources by 2020.1 New capital investments are critical to the administration’s goals of reducing our reliance on pe-The tax code has historically been a significant policy instrument for shaping energy decisions in the marketplace. Much attention has been paid to the magnitude of federal dollars supporting different energy sources. A recent study by the U.S. Energy Information Administration (EIA 2008a), for example, estimates that roughly two‐thirds of tax sub-sidies for energy production were received by producers of fossil fuelstroleum products and reducing greenhouse gas emissions.