Monday, December 29, 2008
President-elect Barack Obama has been talking up green jobs, green
energy, and green infrastructure for a while, but in the past few
weeks, as pressure has mounted for a new economic stimulus package,
his push for green spending has acquired a sense of immediacy: If
Congress is going to spend hundreds of billions of dollars to boost
the economy, as it appears likely to do, how much should be spent on
green projects? And do some green projects hold more promise for the
economy than others?
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There have certainly been many suggestions. Washington, over the past
month or so, has turned into something of a holiday showcase for
backlogged projects and wishful plans. The National Governors
Association and the U.S. Conference of Mayors have each published
lists featuring green projects they say are "ready to go"—ready for
construction—in 2009. Activists, utilities, and trade groups have
offered up their own lists, sending them along to the Senate Energy
and Natural Resources Committee, which in turn has turned them over to
Democratic congressional leaders.
From what Obama has said thus far about the stimulus package, which is
rumored to be in the $700 billion-to-$800 billion-plus range, he is
hoping to accomplish two things at once: stabilize and restore the
flagging economy while advancing his energy agenda. Observers say that
to do so, he will have to strike an appropriate balance between
short-term and long-term projects, a balance that delivers quick,
tangible aid to the economy but also lays a foundation for
transforming the country's energy portfolio.
The "green" proposals being bandied about are a motley bunch. They
include calls for fixing old things, such as retrofitting homes and
schools and offices with energy-efficient technologies, and for
building new ones, such as new power plants, new solar farms, and new
fueling stations for flex-fuel vehicles. They cover pitches for large,
multiyear projects—new municipal sewer systems and high-voltage
transmission lines—and pitches for smaller ones, such as installing
windows. And they encompass a range of ideas for distributing the
money (grants, tax credits, and loan guarantees, to name a few) as
well as a range of recipients, including homeowners, utilities,
manufacturers, developers, and city and state governments.
In addition to the calls for investment, there are calls for reform.
Many observers say the stimulus package gives lawmakers a rare
opportunity to overhaul regulatory policies that have hampered the
growth and success of the renewable energy industry (particularly wind
power) and set too-lenient efficiency standards for new office
buildings. One far-reaching move, they say, would be to give greater
control to federal regulators over the construction of new electricity
transmission lines across state jurisdictions, thereby overriding
fights among states and reassuring wind investors that their energy
will find buyers in distant markets.
Of the package's yet-to-be-determined price tag, as much as one third
of it may end up being tied to energy; some lawmakers have said they
would like to see a minimum of $100 billion in energy-related
investment. The big question, of course, is how that money will be
divided up.
At the moment, a consensus seems to be building around the notion that
energy-efficiency projects will have the quickest impact on the
economy, since they are among the easiest to deploy—and they lower
utility bills. As Joe Loper, Alliance to Save Energy's vice president,
said at a recent hearing, "Transformations have long lead times and
many pitfalls. We should not crowd out opportunities for incremental
gains."
The group, along with several other organizations, including Edison
Electric Institute, the main trade group for the electricity industry,
has called for retrofitting 2 million buildings over the next two
years and for at least $13 billion for energy-efficiency programs.
Retrofits, of course, tend to be cheaper than infrastructure projects
or new plants. Converting a coal plant to biomass, for example, might
cost about $100 million; replacing the windows at city hall, about $2
million. But they also only begin to address questions about supply
problems. "It's important to recognize that energy makes a huge
contribution to our economic recovery, not just through immediate jobs
but through providing affordable energy for the future," says Karen
Harbert, managing director of the U.S. Chamber of Commerce's Institute
for 21st Century Energy. "I don't think we should shy away from
something that could create jobs two, three, four years from now. New
plants have very long supply chains. Orders need to be placed now for
parts. Pieces of equipment take time to manufacture."
Both Obama and Vice President-elect Joe Biden have said that they do
not want the stimulus package to turn into a typical federal
appropriations bill, stuffed with earmarks and goodies for a
congressman's home district. How, then, will Congress designate what
it wants to fund?
Part of the answer appears to be that Democratic leaders are looking
to help state and city programs that already exist but are badly in
need of funding. Likewise, Congress has approved two giant energy
bills in the past three years with hundreds of new programs. But in
many cases, the programs have been left unfunded. In 2007, for
example, Congress authorized a new smart-grid program with a price tag
of $200 million a year for three years. But that program has gone
largely unfunded, according to records.
Environmental advocates, meanwhile, hope that long-neglected areas,
such as water treatment and land preservation, will finally get
attention and that the stimulus package will promote conservation
after years of resource depletion. Much of the nation's
infrastructure—roads, sewer systems, transport pipelines—dates to the
World War II era, if not well before then; some sewer systems in the
Northeast are more than 100 years old and vulnerable to flooding after
heavy rain.
Betsy Otto, vice president of American Rivers, says lawmakers should
focus on alleviating problems in existing systems and on restoring
wetlands and other natural protections. "Partly, this is a question of
follow the money," Otto says. "In the past, money has been in funding
pots for the Army Corps of Engineers and highway development.
Communities have followed where funding sources are—new development,
creating taller and taller levees. Part of a sound national strategy
would be investing in efficiency and natural solutions."
Inevitably, there will be clashes. Some groups say the stimulus
package should include funding for carbon capture and sequestration
technology for coal plants; others say the money should be spent only
on renewable technology. Some want massive funding for roads, in part
to alleviate wasteful idling in big-city traffic; others say funding
for roads should be redirected to companies working on electric cars
or advanced biofuels.
A point of general agreement, however, is that the stimulus package
should go beyond piecemeal funding and look at setting broad policies
that will encourage private investment amid poor conditions. "I don't
know if we have the luxury of picking which industries we want to
support in this economic crisis," Harbert says. "We need all types of
jobs and all types of energy."
