Funding for Clean Energy Projects Can Provide
Immediate Stimulus and Long-Term Economic Benefits
One of the
first and most important jobs for the new Congress in January will be to
pass an economic stimulus bill to jump start the economy, create jobs, and
revitalize American industry – a tall order, which could cost between $500
billion and $1 trillion. Therefore, it is critical for this legislation to
fund projects that not only will create jobs and economic activity in the
near term but also will strengthen our long-term economic security, and that
includes addressing the urgent threat of climate change. “A transition to a
clean energy economy will create hundreds of thousands of American jobs in
the near term while also stimulating long-term business opportunities for
American entrepreneurs, reduce our vulnerability to volatile, global fossil
fuel prices, and mitigate the widespread economic impacts of climate
change,” said Carol Werner, executive director of the Environmental and
Energy Study Institute (EESI). Werner noted that EESI has identified four
general components that would stimulate the economy in the immediate and
long term:
1. Extend renewable energy tax credits and make them refundable
2. Provide funds for energy efficiency programs, green jobs, and loan
guarantees
3. Provide funds for farm bill energy programs and conservation agencies
4. Invest in repair of transportation infrastructure and expansion of
transit options
1. Extend renewable energy tax credits and make them refundable
Energy efficiency and renewable energy have been shown to generate more jobs
and more domestic wealth than other types of energy development. According
to research by Roger Bezdek for the American Solar Energy Society (ASES),
the renewable energy (RE) and energy efficiency (EE) industries created a
total of 8.5 million jobs (direct and indirect) in 2006 –– 450,000 jobs in
RE and 8 million jobs in EE throughout the United States. As many as one out
of four workers in the United States could be working in RE or EE industries
by 2030. These jobs are not just engineering‐related, but also include
millions of new jobs in manufacturing, construction, accounting, clerical,
and management. Long-term extension of the production tax credit (PTC),
investment tax credit (ITC), and clean renewable energy bonds (CREBs) would
help to reassure investors, attract additional capital, and create jobs to
implement projects. Making the tax credits fully refundable and/or
transferable is also essential if they are to be effective during an
economic downturn, when few companies are likely to have taxable profits.
Additionally, these credits should be equalized among all renewable
technologies, including biomass used in cofiring at existing plants, which
is currently excluded. Cofiring biomass with fossil fuels has been shown to
be one of the cheapest and fastest means to implement use of renewable
energy sources.
2. Provide funding for energy efficiency programs, green jobs, and loan
guarantees
Energy efficiency is the most immediate, cost-effective way to reduce the
use of fossil fuels and cut monthly bills for households and businesses.
Existing programs such as the Weatherization Assistance Program and Energy
Star have proven track records but have been underfunded for many years.
Doubling these budgets will enable a million more homes to be weatherized
for the heating and cooling seasons and enable much greater use of Energy
Star products in small businesses and other consumers. Newly authorized
programs such as Energy Efficiency and Conservation Block Grants for states
and cities should be fully funded. Local officials are ultimately
responsible for implementing EE and RE projects but each community has
different needs. The block grant program provides that flexibility.
Additional funding should be appropriated for energy efficiency retrofits to
public, residential, commercial and industrial buildings. Public schools in
particular have suffered from many years of deferred maintenance. Funding
for school repair, renovation, and modernization can utilize energy
efficiency and green building practices that will help school districts save
hundreds of thousands of dollars per year and provide better teaching and
learning environments. The federal government itself is behind on carrying
out many of the sustainable energy strategies it requires for its own
buildings. Adequate funding for agencies’ building programs and DOE’s
Federal Energy Management Program (FEMP) will get projects out of the
pipeline and start saving energy and dollars on behalf of taxpayers.
The Green Jobs Title (Title X) of the Energy Independence and Security Act
of 2007 (EISA, P.L. 110-140) was adopted with the intention of training
displaced or unemployed workers in energy efficiency and renewable energy
jobs. To ensure a qualified workforce to implement new projects, education
and training for current and future code officials, inspectors, architects,
engineers, builders, contractors, utility personnel, energy raters, and
manufacturing/installation workers will be critical in the transition to a
clean energy economy. Training on “low-energy” home construction and
retrofits is especially important as homeowners faced with mounting debt
search for ways to reduce their monthly bills. “Low-energy/low-carbon”
buildings will be a major part of the solution to climate change. Buildings
use over 40 percent of U.S. energy and account for over 40 percent of the
C02 emissions, and yet a huge gap exists between building codes and
standards that are the legal minimum and best practices that will actually
reduce energy use and ensure safety and comfort. Full funding for this title
will be an essential component of the stimulus package.
The U.S. Department of Energy (DOE) has existing authority to provide loan
guarantees for the production of new innovative solar energy systems, wind
turbines, and other renewable energy technologies. DOE has announced $38.5
billion to be used for this purpose. Only $10 billion has been designated
for renewable energy and energy efficiency projects, with the remainder
reserved for nuclear and “advanced” coal. For a given energy output,
renewable energy production has been shown to create more jobs in a shorter
amount of time than nuclear or coal. Increasing funding for loan guarantees,
shortening the time frame for applications, and carving out more of the
funding for renewable energy and energy efficiency projects would contribute
greatly to an economic stimulus.
3. Provide funding for farm bill energy programs and conservation agencies
The Energy Title (Title IX) of the 2008 Farm Bill (The Food, Conservation,
and Energy Act of 2008, P.L. 110-246) contains a number of programs with
potential to generate green jobs and promote rural economic activity in the
near term. The Biobased Markets program, Rural Energy for America Program
(REAP), Biorefinery Assistance, Biomass Crop Assistance Program (BCAP),
Repowering Assistance, Rural Energy Self-Sufficiency Initiative, and
Community Wood Energy Program, in particular, are appropriate for stimulus
legislation, and several have existing rules in place. In total, the farm
bill authorizes over $1.4 billion in mandatory and discretionary funds for
these seven programs. By providing additional funding above this level,
stimulus legislation could provide a much needed boost to rural economies.
Conservation work has long been appreciated for its potential to create jobs
and provide important public services simultaneously. The Civilian
Conservation Corps was a key component of President Roosevelt's New Deal,
and similar programs exist in a number of other nations. There is an
opportunity in the current stimulus bill to provide additional funding for
the U.S. Forest Service, National Park Service, Wildlife Refuge System and
other conservation agencies. This funding would create jobs for wildlife
habitat management, restoration forestry, and hazardous fuels reduction.
These activities would also generate woody biomass that could be used as a
renewable energy feedstock, complementing renewable energy incentives.
According to the National Parks Conservation Association (NPCA), there are
over $1 billion worth of ready-to-go projects in the national park system
this year, which can rapidly produce jobs while also renewing our national
heritage and helping to revitalize our national parks for our children and
grandchildren.
4. Invest in repair of transportation infrastructure and expansion of
transit options
Both transit investments and highway maintenance have been shown to have job
creation and economic multiplier effects that are equal or superior to
construction of new highway lane miles. In addition, the demand for public
transportation is steadily increasing and miles driven are falling. Studies
of public transportation capital needs show that $47.8 billion could be
invested in much needed projects within a two-year time frame, and would
create more than 1.3 million new jobs. Within an even shorter time frame,
transit investment still creates jobs quickly. A recent APTA survey
identified more than 700 "ready-to-go" public transportation projects worth
$12.2 billion that could be advanced within 90 days. These projects would
create 340,000 new jobs in the coming months. "Ready-to-go" transit projects
include the acquisition of new clean fuel buses and rail cars, the
construction and rehabilitation of transit stations and maintenance
facilities, the expansion of rail infrastructure, the procurement of
information technology products to improve passenger operations and other
unfunded capital expenses. Therefore, infrastructure investments should be
focused on operation and expansion of transit and maintenance of existing
roads and bridges.
Energy efficiency, renewable energy, and public transit projects are proven
to create jobs and stimulate economic activity. Investing in these projects
will also strengthen the country’s long term economic security by reducing
the impacts of climate change on our natural resources, infrastructure, and
property, and by positioning America as a leader in the burgeoning global
clean energy economy. “We now realize the unprecedented urgency of finding
simultaneous solutions to the economic crisis and climate change.
Fortunately, the solutions are right in front of us and can be implemented
immediately through thoughtful and innovative policies, creating a better
deal for all Americans,” Werner said.
Environmental and Energy Study Institute
1112 16th Street, NW, Suite 300, Washington, DC 20036-4819
Phone: (202) 628-1400 | Fax: (202) 628-1825
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