Energy Buzz

Energy Insights from Experts Marilyn Brown and Arthur Ragauskas

Stimulus Package Brings Green Jobs to the Rescue

By Marilyn Brown

Marilyn Brown
Professor, School of Public Policy
Georgia Institute of Technology

The United States is in the midst of an economic downturn of historic proportion. A failed national energy policy has contributed to our shrinking gross domestic product, and investments in a new energy economy can help turn this around. With the need to inject capital into the economy, the nation has an opportunity to invest in a sustainable energy future in ways that have not been politically feasible since 1981. That was the year when President Reagan dismantled the renewable energy initiatives of the Carter presidency following the 1973-74 Arab Oil Embargo.

In his first weekly address since being sworn into office, President Obama described how the American Recovery and Reinvestment Plan will jump-start the economy. While the Administration is still working with Congress to finalize the plan, the House and Senate versions of the plan would spend between $51 billion to $54 billion on green energy. These investments are aimed at laying the foundation for future economic growth. Altogether, the plan is expected to create 3 to 4 million jobs over the next few years, and green jobs are among the most certain of the employment benefits.

The vision is to stimulate economic growth so that we can pay off the rising national debt and move into a long-term period of economic growth supported by a modern energy infrastructure that is powered primarily by domestic energy resources. If successful, the stimulus bill will deliver more secure energy in the long run, less air pollution and lower greenhouse gas emissions, and will replace U.S. earnings now flowing overseas to oil-rich nations located in unstable and unfriendly regions of the world.

According to President Obama's top economic adviser, Lawrence Summers, the stimulus bill must have three features to be effective. It must be timely (that is, spent quickly on "shovel-ready" projects), targeted (to help low- and middle-income people) and temporary (raising the deficit for only a year or two). The green energy initiatives proposed in the stimulus bill seem consistent with these principles. Key proposals include the following:

• Jump-start the transformation to a smarter electricity grid by installing more than 3,000 miles of modernized transmission lines to open up new markets for alternative energy production and 40 million "smart meters" to optimize operations through a combination of data, communications and controls that allow customers to respond to real-time electricity prices signals.
• Double our capacity to generate alternative sources of energy such as wind, solar and biofuels over the next three years by extending the renewable energy production tax credit and creating Clean Renewable Energy Bonds to finance facilities that generate electricity from renewable resources.
• Provide grants to state and local governments to expand energy efficiency and renewable energy programs, in conjunction with a pledge that governors will support regulatory reforms of utilities and strengthen state building energy codes.
• Reduce transportation fuel costs, petroleum imports and carbon dioxide emissions by replacing the federal fleet with more efficient vehicles, modernizing public transit systems, and supporting state and local governments in carrying projects that encourage the use of plug-in electric drive vehicles.
• Save taxpayers money by making 75 percent of federal buildings more energy efficient and by weatherizing at least 2 million homes of low-income families – in both cases, the money that is invested up front to improve the energy integrity of buildings is surpassed by the stream of energy savings that accrue over the useful life of the energy retrofit measures.

Because green energy jobs are more labor intensive than the traditional energy supply industries, such initiatives would produce a meaningful boost in employment. For example, the electric utility and the natural gas service sectors directly and indirectly employ about 5.3 and 3.7 jobs, respectively, for every $1 million of spending. But sectors vital to energy-efficiency improvements, such as construction and manufacturing, utilize 13.3 and 8.3 jobs per $1 million of spending.

According to Rahm Emanuel, President Obama's chief of staff: "You never want a serious crisis to go to waste." The American Recovery and Reinvestment Plan can set in motion investments that have been long overdue.