Q&A: Duke expert talks tax incentives, 'Inconvenient Truth'

As part of the series on the current and potential effects of global warming on our state, The News & Observer asked Dr. Brian C. Murray, an economist at Duke University, to answer your questions about the economic consequences of a changing climate and the various costs and benefits of reducing greenhouse gas emissions through public policies. Murray, director for economic analysis at Duke's Nicholas Institute for Environmental Policy Solutions, has expertise in forestry, agriculture and energy.

Q: In the debate over the causes of climate change and the threat posed by global warming, what is your view regarding the movie "An Inconvenient Truth"?

Lynn Johnson

Raleigh

A: Of the many scientists I have spoken with who study climate change, most agree that the movie is scientifically sound, with a quibble here and there on some details. But I don't think Mr. Gore's purpose was to make the most comprehensive treatise on the science of climate change. Rather it was to construct an evidence-based argument for action, a lawyerly brief it you will. And in that regard the movie succeeds. It is logical, deductive and gives people information they can use to decide whether this is something to be concerned about. It doesn't answer all questions, cover all bases, or extinguish all doubts. But it has established a public conversation about a complex and important topic that could touch virtually every aspect of our lives. The movie sparked interest in special series like this one in The News & Observer and in mainstream national news outlets, without which decisions about what to do would be left to a smaller segment of society. In that sense, the movie democratizes the issue, which is a good thing. But ultimately, the policy solutions to climate change must be based on a deep and evolving understanding of the underlying science, technology, and economics rather than on a two-hour movie. National and international scientific advisory panels serve this need, but they are not always as entertaining.

Q: What tax incentives are provided by North Carolina to help with environmentally helpful purchases, such as solar panels and hybrid cars? Why do we not do more in North Carolina to provide those incentives?

Janis Howard

Smithfield

A: The state of North Carolina has a renewable energy tax credit for investments in solar, wind, biofuels and other renewable energy sources. The tax covers 35% of the initial cost up to a maximum for each technology. The maximum credit for North Carolina households is $10,500, with carryover provisions if all of the credit is not used in a given year. For more information, consult the North Carolina Solar Center.

There are currently no specific incentives in the North Carolina tax code for hybrids and other advanced or alternative technology motor vehicles, although several proposals were considered by the state legislature last year. There are federal tax incentives of up to $2,600 for the purchase of hybrid vehicles, with a phase-down of the credit after a certain number have been purchased during the year and a phase-out of eligibility for higher income taxpayers. Readers can obtain more details on these programs at go.ucsusa.org/hybridcenter/incentives.cfm

As to whether North Carolina should do more to provide tax credits and other investment incentives, this is a political question. A tax credit reduces the amount of tax collected by the state and thereby reduces expenditures on state programs. If citizens believe that this money would be better spent by households on these energy investments than on a range of other state programs or that other revenue sources should be found to pay for the state programs, they may wish to convince their elected officials to enact legislation to increase these tax incentives.