MONTEVIDEO, Uruguay—The South American country of Uruguay relies almost entirely on renewable energy for its electricity, and it wants to help others do the same. Through alchemy, it is planned to use fossil fuels to generate wind power to produce green hydrogen.
It may seem like a dream job for the American government under President Joe Biden, who prioritized the production of renewable energy abroad, including Latin America. But while Uruguay is going to Washington for loans to replace its oil development, the US is blocking loans to so-called high-income countries. “If we have support, we can go faster,” said Ignacio Horvath, CEO of ANCAP, Uruguay’s state energy company, in Policy.
It’s hardly just Uruguay. Most Latin American countries are classified by the World Bank by per capita income based on income. Guatemala, the Bahamas, and Paraguay all fall into one of those categories. This means that, although Latin America is rich in renewable resources, the region does not qualify for many types of US financing to use solar and wind. This includes Caribbean countries that are suffering from severe climate impacts – including increased hurricanes and sea level rise – and are committed to continuing to lead the world’s response to climate change. price
MONTEVIDEO, Uruguay—The South American country of Uruguay relies almost entirely on renewable energy for its electricity, and it wants to help others do the same. Through alchemy, it is planned to use fossil fuels to generate wind power to produce green hydrogen.
It may seem like a dream job for the American government under President Joe Biden, who prioritized the production of renewable energy abroad, including Latin America. But while Uruguay is going to Washington for loans to replace its oil development, the US is blocking loans to so-called high-income countries. “If we have support, we can go faster,” said Ignacio Horvath, CEO of ANCAP, Uruguay’s state energy company, in Policy.
It’s hardly just Uruguay. Most Latin American countries are classified by the World Bank by per capita income as high or high. Guatemala, the Bahamas, and Paraguay all fall into one of those categories. This means that, although Latin America is rich in renewable resources, the region does not qualify for many types of US financing to use solar and wind. This includes Caribbean countries that are suffering from severe climate impacts – including increased hurricanes and sea level rise – and are committed to continuing to lead the world’s response to climate change. price
The US government and multilateral development banks have long-standing rules that limit lending to high-income and high-income countries in Latin America. These crises are particularly short-lived because Latin Americans are aware of the threat posed by climate change. On average, more than 80 percent of individuals in Mexico, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama consider climate change a serious threat. Public opinion is likely to improve as climate impacts—such as the prolonged droughts afflicting farmers in Argentina, Brazil, and Paraguay—intensify in the region.
As a result, Latin American governments are often willing to promote renewable projects, both for economic purposes and to combat climate change. In Chile, Environment Minister Maisa Rojas helped draft the final report of the United Nations Intergovernmental Panel on Climate Change. In Colombia, President Gustavo Petro insisted on a pledge to stop oil exploration, even though the sector generates almost a quarter of the country’s foreign income. In August, the UN appointed Grenadian politician Simon Stiell to its top climate post, the third consecutive leader from Latin America and the Caribbean to hold that post.
There is no doubt, however, that Latin American governments need some encouragement to expand a green list. That was shown during the pandemic, as governments poured stimulus money into traditional industries, including hydrocarbons. That’s even more true today, as the region’s recovery is weighed down by COVID-19 debt, high inflation, a strong dollar, rising interest rates, and food and beverage crises. strong. These challenges have limited government funds for investments in renewable energy generation, electric transportation infrastructure, energy storage capacity, and electrification. In many countries, there is still a reluctance to reduce fossil fuel subsidies, which undermines renewable energy projects.
Limits on US support for Latin American innovation have also removed the United States as an important diplomatic tool in Washington’s tug-of-war with Beijing for four years. district organization. It is very true that according to the energy transition of Latin America, the Europeans and the Chinese are expected to invest in the manufacturers of renewable technologies and electric vehicles. Argentina is a long-standing partner of the United States in South America, for example, but in its high desert in the northwest, China has built the largest solar system. In the nearby salt mines, Chinese companies control much of the lithium needed by companies and electric vehicles.
To be fair, the Biden administration has identified this problem. In June, at the Summit of the Americas, the Secretary of State of the United States, Antony Blinken, promised to encourage special organizations to expand financial opportunities for the country. e in the country-affected by development challenges but excluded from many forms of international financial assistance. He reiterated that promise during a trip to South America last month. The Secretary of the Ministry of Finance of the United States Janet Yellen has requested a complete review of the way banks solve different developments, such as climate change, that require different methods than reducing poverty.
One option for the United States is to accept the next president of the Inter-American Development Bank, who will be elected in November, with a base increase to expand loans for renewable projects. But now, the United States can help solve this problem by itself by removing its own barriers to financing the countries of Latin America high and middle income.
Historically, US financial aid was designed to fight poverty. Those who support that approach point to the large and growing demand in most of the world. In 2020, the disease pushed 70 million people into extreme poverty, the highest one-year increase in decades. The United States has a moral and positive example of reducing poverty abroad.
That said, the new US development agency, the International Development Finance Corporation (DFC), is said to have a broader mission. Established in 2019, the DFC is designed not only to combat poverty but also to provide alternatives to “state-controlled banking by sovereign governments”—in other words, Chinese loans. It is done through loans, loan guarantees, matching funds, due diligence, and technical assistance. Its high status has led to the hope that the agency will become the first tool of the US to compete with Beijing’s Belt and Road Initiative, a priority for the United States and its G-7 allies. It has the ability to make investment changes in renewable energy.
However, the DFC needs to prioritize low- and lower-middle-income countries, with rare exceptions. The DFC board includes a chief development officer. In Latin America, it does not operate in much of the Caribbean or in Chile, Panama, or Uruguay—three democratic partners of the United States that are well positioned for “friendly-shoring” of US supply chains. .
There are calls to make the DFC, as well as the Export-Import Bank of the United States, more flexible lenders to better value the China Development Bank and the Export-Import Bank of China. In practice, despite regulatory hurdles, the DFC has long provided high-middle-income countries with income for that purpose, much to the chagrin of by the anti-poverty campaigners in its “Foggy Bottom connection,” the home of the US State Department.
The US Congress has already made at least one clear exception. In 2019, to reduce Europe’s dependence on Russian oil and natural gas, lawmakers authorized the DFC to support energy projects in Europe regardless of the recipient’s income. .
The same should be done for renewable energy projects everywhere, and the White House should find other ways to finance renewable energy projects and to attract private investment in that sector in all of Latin America, an important arena for very strong competition with a lot of renewable potential and great economic demand.
The renewable sector of Latin America is expanding without much support from the US and not at the speed and scale needed to achieve the goals of the Paris Agreement. More than a quarter of its energy comes from renewable sources, twice the global average. At the same time, countless major renovation projects are piling up in boardrooms awaiting funding.
Although Uruguayan officials left empty handed from meetings with the US government, the country’s green hydrogen project is still moving forward. The governments of China and Europe have expressed interest in providing equipment for electricity – to split water into hydrogen and oxygen – and for the production and use of fossil fuels, obtained by blending carbon monoxide and hydrogen.
But the country is hoping to retool most of its oil infrastructure, and its reliance on government funding has slowed that transition. “We see potential everywhere,” Horvath said.
How does the REAP grant work?
The REAP program was created to help farmers, agribusinesses, and rural businesses improve their resilience. This is done in two main ways: Grants and loans to finance the installation of renewable energy such as solar power. Grants and loans to finance energy improvements like LED lighting.
Should the REAP grant be taxable? REAP grants are considered taxable income by the IRS and the recipient will receive a Form 1099. Read also : Environmental risks from artificial lighting at night are widespread and increasing across Europe.
What is a USDA REAP loan?
The program provides secured financing loans and grants to farmers and small businesses in rural areas for renewable energy or improved strength.
What is the clean energy loan program?
The California Energy Commission’s Energy Conservation Assistance Act (ECAA) program provides 1 percent interest loans to cities, counties, special districts, public colleges and universities, public health agencies, and public hospitals. To see also : The description in Spanish Alarma United States – Diálogo Américas. The loans finance the improvement of energy and energy production.
What can the REAP grant be used for?
Funds can be used for special assistance, building trust funds, RHNA/Housing Element plans, special plans, action research, staffing and needs discussion, and other uses. Read also : How the Inflation Reduction Act will help the United States lead the way in the clean energy economy. REAP funds cannot be used for construction projects.
Does IRS audit home energy credits?
An audit by the Treasury Department’s tax inspectorate found that the IRS was unable to accurately track and record family income tax credits. The IRS does not require third-party records to prove that taxpayers actually purchased home improvements or made improvements to a property.
Who does the IRS look for the most? The IRS audits individuals to verify that they have reported their taxes accurately and, if they have not, to determine whether there is too much tax owed. in debt. There are different audit procedures on a taxpayer’s income. In recent years, the IRS has looked for taxpayers who make less than $25,000 and those with $500,000 or more who are higher than the average.
How likely are you to get audited by the IRS?
How likely is the IRS to find out? The amount of audits is very low, less than 1% of all taxes audited per year.
What causes red flags for the IRS?
While the chances of an audit are slim, there are many reasons why your return might be flagged, triggering an IRS notice, experts say. tax rate. Red flags can include the size of the book compared to income, unreported income, debt repayments and more.
Are grants always tax free?
The good news is that your scholarship and your money will not be paid if the money was for research or studies for a degree student who spent money to pay expenses at a qualified educational institution.
What makes a grant taxable? Are grants subject to taxable income? Most business grants are subject to taxable income, which means you have to pay taxes. College grants are not taxable income (as long as the money is spent as needed). Talk to your tax professional about your specific situation.
Are grants ever taxable?
Most business grants are taxable Effective June 8, 2022. Generally, the money you receive from a small business grant (regardless of the source) the income is taxable on your federal income tax return.
What are the advantages and disadvantages of grants?
8 Advantages and Disadvantages of Business Contributors
- Free money. The number one benefit of a business loan is the free cash flow. …
- Access Information. …
- Sweating experience. …
- Earn Loyalty. …
- Spend Time. …
- Hard to Find. …
- Uncertain Updates. …
- Attachment String.
What are the advantages and disadvantages of auxiliary blocks? One of the advantages of block grants is that they allow states flexibility in spending and reduce restrictions. One disadvantage of blockchain is the inability to use the money. As a way of organizing government, federalism has both advantages and disadvantages.
What is an disadvantage of a grant?
There are strings attached to the money you earn. You can’t do whatever you want with money. Most help is short-lived. Once it’s over, you have to start over.
