For Immediate Release: December 17, 2008
For more information contact EESI at communications [at] eesi.org or (202) 662-1884
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:
- Extend renewable energy tax credits and make them refundable
- Provide funds for energy efficiency programs, green jobs, and loan guarantees
- Provide funds for farm bill energy programs and conservation agencies
- 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.