Michigan Gov. Jennifer Granholm (D) is trying to rescue her state’s tanking economy by taking it “from rust to green.”

On Monday, Granholm signed a law that will channel $220 million toward tax credits for the development and manufacture of electric-vehicle batteries, on top of $335 million in credits the state approved in January.

“This expansion of incentives will keep our momentum going and demonstrate that Michigan is uniquely qualified for a significant portion of the $2 billion in federal recovery money designated to build America’s advanced-battery infrastructure,” she said.

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On Tuesday, at an energy summit organized by Newsweek in Washington, D.C., Granholm emphasized the need to invest more public funds in energy technologies if the country intends to become energy independent.

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“A lot of the [advanced car] batteries now come from Asia,” she said. “If we just transfer our reliance to foreign batteries, we haven’t achieved energy independence. … If we decide we want to be energy independent … then we need to develop this technology and take it to scale. We have to decide if we want manufacturing in our country … It is in our national interest.”

Appearing on a panel with representatives from domestic automakers and automobile dealers, Granholm rejected the idea that increasing the gas tax would be the best way to encourage a transition to more efficient vehicles, emphasizing instead the need for tax incentives and a price on carbon at the federal level.

Grist caught up with Granholm after the panel to ask about progress on the ambitious energy plan she outlined in February. In her “State of the State” address, she called on Michigan to reduce its reliance on electric plants powered by coal and natural gas 45 percent by 2020, weatherize more than 100,000 homes, and make enough efficiency gains to eliminate the need for new coal-fired power plants.

Granholm said the state has been making progress toward the goals by decoupling energy rates from energy usage through the Michigan Public Service Commission, and by distributing $200 million in weatherization grants for homeowners.

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The governor is pushing hard to create green jobs in her state, which has a 12 percent unemployment rate, the highest in the nation. She told Grist the state is laying the groundwork for a “green energy jobs corps” to train residents for new occupations. She said she was headed to Houston on Tuesday afternoon to make a pitch to a wind-turbine manufacturer and a wind developer to bring their business to Michigan. She also said she has directed the state’s energy companies to apply to the Department of Energy for grant funding allocated to carbon-capture-and-storage technologies in the stimulus package.

“If the Obama administration is serious about carbon capture and storage, while we get through this period of time, we’d like to be the place where that breakthrough occurs,” she said.

“What I really want is for Michigan to employ people in clean technology,” Granholm added.