On Tuesday, the Vice President’s office will send Obama a progress report on “The Transformation to A Clean Energy Economy” (PDF). It’s a wide-angle assessment of the stimulus spending that has gone to clean energy projects, the private capital that has been leveraged by those investments, and the jobs that will be saved or created as a result. The document is fairly short and worth reading; it’s impressive stuff. I want to make a general point or two about it, but first, here are the top line results:
- Recovery Act investments in renewable generation and advanced energy manufacturing of $23 billion will likely create 253,000 jobs and leverage over $43 billion in additional investment that could support up to 469,000 more jobs, putting us on track to meet the goal of doubling our renewable energy generation, including solar, wind and geothermal, in just 3 years.
- The Federal Government, partnering with industry, has already committed to invest up to $16 billion in projects that will transform the transportation sector, including plug-in hybrids, all-electric vehicles and the infrastructure needed to power them, as well as new clean fuels.
- The $4 billion in Recovery Act smart grid investments will likely result in 43,000 new jobs, and be matched more than one-to-one by private sector funding that could support up to 61,000 additional jobs on smart grid projects that will reduce cost, increase reliability and give consumers more choice and control over their energy use. An analysis by EPRI estimates that the implementation of smart grid technologies could reduce electricity usage by more than 4% by 2030. That would mean annual utility bill savings of $20.4 billion for businesses and consumers around the country.
- We are on track to weatherize the homes of half a million low income Americans through retrofits by the end of next year. Over the next several years, federal investments will help millions of American families cut their utility bills by making their homes and appliances more energy efficient.
- We are also setting long overdue standards for everyday appliances like refrigerators, microwaves and washer/dryers. About two dozen standards will be finalized over the next few years.
- With Recovery Act funding and existing loan guarantee authority, we are investing over $10 billion in CCS projects, which will secure at least an additional $4 billion in private funds to produce $14 billion of public-private investment in clean coal technology.
- By the end of our first two years in office, we will have provided conditional commitments for loan guarantees for two nuclear power operators to add three to four new nuclear reactors.
- In 2010, our budget includes $12.6 billion in funding for key science agencies to support advanced research and development at our national labs and universities. In addition, using $400 million in Recovery Act funds we have started the Advanced Research Projects Agency – Energy (ARPA-E) that invests in targeted projects to accelerate the pace of innovation to make advanced energy technologies like energy storage and biofuels dramatically more effective and affordable.
Two general points to make about this stuff:
1. Why not a few victory laps? I worry that in all the anguish about climate legislation and Copenhagen, green activists aren’t doing enough to publicize and build on what the administration is doing. They seem to suffer from the weird impression that celebrating anything that doesn’t completely solve the problem will “let the administration off the hook” by distracting or demotivating people. But social psychology tells us the opposite: people are subject to peer pressure and herding instincts; they like to do what other people are doing. When they hear that other people are investing in energy and efficiency, it will make them more inclined to do the same, not less. It would be better to create the (self-fulfilling) impression that this kind of thing is mainstream than to keep insisting that nothing worthwhile is being done.
2. Investments and regulatory standards create tangible change in the short-term. Everyone is obsessively focused on the exact mechanism for putting a price on carbon, as if it’s the end-all be-all of climate policy. But no politically realistic price on carbon will bite in any substantial way for the next 5-10 years. In the interim, it’s these kinds of investments and standards that will drive immediate private capital deployment and job creation.
Greens should learn the lesson: fight for stronger complementary policies in climate legislation! Larger investments, tighter efficiency standards, higher renewable energy standards. This is the kind of stuff the spurs short-term action; short-term action is what builds political support; political support is what will allow greens to come back later and improve the carbon pricing system. You need a carbon pricing system as the long term engine, but the policies funded by the stimulus bill are spark plugs.