* Tax reform could help boost renewable energy - Deese
* Obama also favors “targeted and smart” research spending
* Divided Congress makes major climate legislation remote
By Roberta Rampton
WASHINGTON, Jan 24 (Reuters) - President Barack Obama will renew his push to spur investment in renewable energy projects that create jobs as a key part of his second-term strategy for tackling climate change, a top White House policy adviser said on Thursday.
This time around, though, Obama won’t have the $90 billion in economic stimulus funds that his administration earlier pumped into clean energy and “green jobs” projects.
Instead, Obama wants to see “targeted and smart” investments in research and demonstration projects, and will also use the upcoming corporate tax reform process to try to “level the playing field” for renewable forms of energy, said Brian Deese, deputy director of the National Economic Council.
Obama’s first-term clean energy efforts were tarnished by failed loans to companies like Solyndra, the California solar panel maker that went bankrupt in 2011 after receiving more than $527 million in government backing.
But Obama has continued to argue that the United States cannot fall behind in a global clean energy race dominated by countries like China, South Korea and Germany, which heavily subsidize their domestic industries.
“Our political system and our private sector are never going to operate in the way that some of those countries operate to strategically support targeted industries and go all-in in that way,” Deese told a National Journal/The Atlantic event on energy innovation.
“The question for us is, how do we have an American-style approach that actually leverages the strengths that we have, while not ceding the race completely?” Deese said.
Obama made a passionate pledge in his second inaugural address on Tuesday to combat climate change, citing recent fires, drought and storms, “knowing that the failure to do so would betray our children and future generations.”
While those words attracted a lot of attention, what came next in the speech was also important, Deese said - Obama’s contention that the nation must use more “sustainable energy sources” to maintain its “economic vitality” as well as to protect the environment. “We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise,” Obama said.
The White House is realistic about the slim chances of advancing comprehensive climate legislation in Congress, where many Republicans are staunchly opposed.
Instead, Deese said the administration will look for ways to use other types of legislation to accomplish clean energy goals, including upcoming efforts to overhaul the tax code.
“The way that corporate tax reform gets done could have a dramatic effect, long-term, about the incentives for investment in the United States for different types of technologies, renewable technologies,” said Deese, who works on tax policy and manufacturing issues.
Obama recently pushed for an extension of the wind production tax credit and other clean energy tax credits as part of the “fiscal cliff” deal with Congress, Deese noted.
Tax breaks for traditional fossil fuel production have long been enshrined in the U.S. tax code, Deese said.
“One of the things the president has talked about is ... at a minimum, we should have a level playing field” for renewable energy, he said.
Obama also wants to explore “targeted and smart investments to help catalyze renewable energy technologies” that can lead to more U.S. manufacturing jobs, said Deese, adding that projects to make buildings become more energy efficient is another area of promise.
He said Obama still would like to see Congress pass a “clean energy standard” with annual targets for electricity from clean sources that would allow utilities to decide what type of renewable power source would best fill the quota.
Obama also may take actions that don’t require congressional approval or spending, such as the increase in fuel economy standards set during his first term that will cut carbon pollution and fossil fuel use dramatically over 25 years.
“You saw the president not hesitate to use administrative action when he ran up against barriers in Congress,” Deese said. (Editing by Ros Krasny and Doina Chiacu)