Stimulus may put some wind in clean energy's sails
02/16/2009 2:05 PM
02/20/2009 4:10 PM
WASHINGTON — Many of the jobs that the economic stimulus would create are generated by the parts of the plan that also are intended to help combat global warming and reduce the nation's dependence on fossil fuels.
The $787.2 billion stimulus plan that President Barack Obama will sign Tuesday includes the nation's largest investment to date in cleaner energy. More than $80 billion in spending and tax cuts will go toward renewable domestic energy, a better grid to transmit electricity, energy research and programs to reduce the use of fossil fuels, such as weatherizing homes and federal buildings.
It's difficult to put precise numbers on how many new green jobs to expect. Government economists use a formula to figure out how a fiscal stimulus translates into jobs, but uncertainties remain. Some of the results will depend on decisions that the Department of Energy and the states make about how to spend the money.
Even so, it's possible to look at the big picture and see how the environmental spending can create some jobs in the hard-hit manufacturing and construction sectors.
Dorothy Coleman, the vice president of tax and domestic economic policy for the National Association of Manufacturers, said she didn't have an estimate of the number of energy jobs the stimulus plan might produce but that the association expected the renewable energy provisions to help some of its members expand production and add workers.
The association supported incentives for wind and solar development for that reason, Coleman said. Similarly, weatherizing schools, hospitals, federal buildings and homes would create a need for goods made in the United States, such as more energy-efficient windows, she said.
The White House's economists have said that the overall stimulus plan would create or save more than 3.5 million jobs by the end of 2010. The government estimates that nearly 500,000 jobs will be created by the end of 2010 from investments in the energy transmission system, advanced battery technology and energy efficiency.
Robert Pollin, a professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts, said the green investment portion of the stimulus more broadly should yield about 1.7 million jobs, about 30 percent of them in construction.
"Of course, the jobs crisis is deepening quickly, so that much of an increase in spending for green investments and job creation is not big enough on its own to fight the countervailing recession forces," Pollin said.
Still, Pollin has said that investments in green technology create more than three times as many U.S. jobs as fossil fuel production because they generally require more workers and much of the money stays in the U.S. economy.
Daniel Weiss of the Center for American Progress, a liberal policy-research group in Washington, said that Obama's recovery plan would more than triple clean-energy investments.
The efficiency elements of the plan are useful because they put people to work quickly and put money into the pockets of people who pay heating or air conditioning bills every month — and those savings keep adding up, year after year, said Nathan Hultman of the University of Maryland School of Public Policy.
"Arguably, it's better than any other rate of return you can get in the economy," he said.
The White House estimates that the average family would save $350 per year on heating and air conditioning after weatherizing.
The spending on weatherization would create jobs quickly, Hultman said, because there's no need to invent anything; the materials and skills are readily available.
The bill sets aside $5 billion to improve energy savings in more than 1 million modest-income homes and about $4.5 billion to weatherize federal office buildings.
Weatherizing buildings across the United States offers an easy, relatively cheap way to put people to work and cut energy consumption and costs, said Phil Angelides, the chairman of a coalition of labor, business, community and environmental leaders called the Apollo Alliance that promotes investments that build clean-energy industries and cut energy costs.
About 40 percent of energy use and carbon emissions in the United States come from constructing, operating and powering buildings.
Other parts of the stimulus plan related to cleaner energy that might create jobs:
- Transportation: The measure provides $8.4 billion for public transit and $8 billion for high-speed rail.
The American Public Transportation Association surveyed transit agencies starting a year ago and recently released the results. It found that 227 public transportation agencies said they could provide 787 projects that were ready to start within 90 days that otherwise wouldn't have been able to proceed. It said these projects would "create and sustain more than 440,000 new jobs in the coming months."
The bill also provides a tax credit of up to $7,500 for plug-in hybrid vehicles and funding for advanced battery technology in an effort to stimulate the automotive industry.
Menzie D. Chinn, an economist in the School of Public Affairs at the University of Wisconsin, said that tax credits for fuel-saving cars might have helped the auto industry incrementally, but a more important benefit would come from boosting the economy overall and fixing the financial system to encourage more people to buy cars.
- Renewable energy: Over the next decade, the government will provide $20 billion in tax incentives for renewable energy and energy efficiency, including grants and an extension of the production tax credit for renewable energy.
Greg Wetstone, the American Wind Energy Association's senior director of government and public affairs, said the plan would create jobs in the wind industry and was a "critical down payment" on ways to increase the nation's use of renewable energy. A developer needs only six months to set up a wind plant to generate electricity, he said.
Wind advocates also say that since many of the parts of wind turbines are so large, it makes economic sense to build them in the United States to save on transportation costs.
The U.S. wind market grew rapidly last year: Its power-generating capacity increased by 50 percent. The industry also created 35,000 jobs in the U.S. for a total of 85,000, according to the Global Wind Energy Council in Brussels, Belgium. By late in 2008, however, the financial crisis hit the wind industry and greatly slowed wind-farm projects and turbine manufacturing.
(Jack Chang contributed to this article.)
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