Abstract:

The study provides an overview of innovations and technologies that are needed to support deep decarbonization of these sectors, assesses the existing federal tax credit structure for low-carbon technologies, and explains the role tax credits can play as a decarbonization policy tool. Based on research findings and feedback from experts and thought leaders on issues around the proper design of tax credit policies, the paper outlines different approaches for designing the next generation of federal tax credits, discussing their strengths and trade-offs.