15 Jan 2009: Analysis

Obama’s Plan: Clean Energy
Will Help Drive a Recovery

In a bold departure from past U.S. policies, President Barack Obama sees clean energy and “green jobs” as critical components of an economic stimulus strategy.

by keith schneider

Even in this era of costly crisis and even more expensive rescue, $50 billion is still a lot of money. That sum — perhaps even more — is what Congressional leaders and aides to President-elect Barack Obama say he will propose to build new transit lines, weatherize buildings, manufacture clean next-generation vehicles, and create new “green collar” jobs.

Even more crucial than the scale of the spending on clean energy is what the President-elect says it represents to his overall economic development strategy. Clean energy projects are a crucial piece of an estimated $700 billion to $1 trillion, two-year stimulus plan to put 3 million people back to work, and the first wave of public investment to transform how America powers itself. Remarkably, it now appears that Obama plans to launch his presidency with a daring idea: To anchor the American economy with energy sources not derived from fossil fuels.

Indeed, the incoming president is proposing to take the conventional relationship between the economy and the environment and stand it on its head. Instead of the economy overshadowing and marginalizing environmental concerns, Obama wants to use environmental principles to help drive economic growth.

“A new energy economy is going to be part of what creates the millions of new jobs that we need,” Obama said during a news conference last month. “That’s why my economic recovery plan is going to be focused on how can we make a series of down payments on things we should have done 10, 20, 30 years ago.”

Obama and his energy and environmental team are convinced that a new era of prosperity can be ushered in by weaning America from the way it has powered its economy for nearly two centuries. During the presidential campaign, he vowed to invest $150 billion in clean energy projects over 10 years and create 5 million new “green-collar” jobs.

Chevy Volt
Obama's stimulus package calls for spending $10 billion annually to develop renewable energy.
Obama made it clear that this was a top priority, but the ever-deepening economic crisis has only added to the urgency of passing a stimulus program that relies heavily on developing the clean energy and energy efficiency sectors. In recent days, the president-elect and his team have said that their stimulus plan will include $20 billion in clean energy tax credits, a goal of doubling renewable energy production in three years, and the near-term creation of a half-million jobs in the clean energy sector.

Are Americans really prepared to undertake a transition of the magnitude that Obama envisions, especially with gasoline priced at $1.85 a gallon, 55 percent below the peak last July? And will his clean energy transition help produce the employment and prosperity that he claims?

There are strong indications that the answer to the first question is “Yes.” For more than a decade, according to the Center For Transportation Excellence, U.S. voters have approved 70 percent of public referendums that have called for imposing property or sales taxes for new mass transit systems. Before the credit crisis, sales of full-size SUVs had already begun to slip. Major cities have developed new economic development strategies based on reducing pollution, preserving natural resources, and becoming much more energy efficient. Political opposition to building new coal-fired power plants has been steadily growing.

As for the second question, numerous studies conducted by the government, non-profit groups, and universities conclude that the transition to a clean energy economy will produce millions of jobs. Where will they come from?

A major component of Obama’s stimulus package calls for spending $25 billion to make schools and other public buildings far more energy efficient, to construct transit systems, and to rebuild roads and bridges. This infrastructure spending, the new administration estimates, will likely generate 1 million jobs. Economists estimate that programs to improve energy efficiency of homes and businesses would create 100,000 on-site jobs and hundreds of thousands of indirect jobs. Obama’s plan will call for sharply increasing weatherization programs for low-income homeowners, from 140,000 homes a year to 1 million — a move that would expand the number of private sector workers involved in home weatherization programs from roughly 8,000 today to 78,000. He also intends to make 75 percent of federal government buildings more energy-efficient.

In addition, perhaps as part of the stimulus package, the Obama administration plans to spend $10 billion annually to develop biofuels and other forms of renewable energy and to build a modern electrical grid. A
Are Americans really prepared to undertake a transition of the magnitude Obama envisions?
decade of such investment, says the transition team, will yield 5 million new green-collar jobs, an estimate supported by studies from the University of Massachusetts, the University of California, and the non-profit Apollo Alliance, a clean energy organization where I work as communications director. These jobs would include everything from skilled trades and crafts, to managers, to maintenance employees. The new president’s plan also calls for aiding manufacturers of clean energy equipment by establishing an advanced manufacturing fund, modeled on a program in Michigan that identifies and invests in innovative clean energy proposals.

Obama proposes a doubling of loan guarantees — to $50 billion — to help the auto industry retool to manufacture next-generation vehicles like the Chevy Volt, the new hybrid plug-in that General Motors hopes to introduce next year. The guarantees also will be made available to manufacturers of lithium-ion batteries and other components for electric vehicles. Such investments will produce tens of thousands of jobs and have the potential to stabilize or even reverse job losses in the auto industry.

Most of these green-collar jobs will require more education than a high school diploma but less than a four-year college degree, and will pay family-supporting wages. That’s huge in a nation in which less than 30 percent of adults earned a college degree. And many of these jobs could be created in Michigan and other industrial states hardest hit by recent losses of manufacturing jobs.

The transition to a renewable energy economy is already proving to be a powerful economic engine. Before the current recession, clean energy was the fastest-growing industrial sector in the United States. Sales of new materials and equipment for the renewable energy sector — steel, gears, wind turbines, solar panels, insulation, software, high tech batteries, gauges, and hundreds of other products — reached $25 billion in the U.S this year, up from less than $10 billion in 2004.

In 2008, according to the American Wind Energy Association, the United

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States added 7,500 megawatts of generating capacity from wind — equivalent to 8 large coal-fired power plants. Since mid-2007, 41 new wind turbine and component plants opened or expanded, generating 9,000 new jobs. Texas alone this year spent $3 billion on wind generating equipment. Wind is the leading edge of a clean energy industrial sector that, according to various studies, produced 500,000 new green-collar jobs in the U.S. in the past three years.

Still, executives in the oil, coal, and utility industries, and their allies in Congress, are skeptical that a big change in the status quo is coming. Holding off the new clean energy economy would preserve trillions of dollars of investments in coal, oil, and the equipment that runs on both. Expect a huge fight in Washington, especially over how to regulate emissions of greenhouse gases.

Opponents also believe they have history on their side. After all, they note, the last time an American president got this exercised about clean energy was during the oil crisis of the 1970s, when Jimmy Carter deregulated oil and gas prices, created the Department of Energy, prodded utilities to switch from oil to natural gas and coal, increased fuel mileage standards in cars, and spent lavishly on research and development for solar and other alternative sources of energy.

Then oil and gasoline prices dropped, President Ronald Reagan dismantled Carter’s White House rooftop solar array, and Detroit invented the SUV. By 2008, American oil consumption had soared to 19.5 million barrels a day — 75 percent of it imported.

Today, however, the urgency underlying the new president’s clean energy plan isn’t oil embargoes or skyrocketing prices. It’s soaring joblessness and a failing economy that runs on carbon-based fuels. As Obama said time
The urgency underlying the new president’s clean energy plan is soaring joblessness and a failing economy that runs on carbon-based fuels.
and again during the campaign, doing more of the same, repeating what isn’t working, just doesn’t make sense.

A leading advocate of this energy transformation is Alan Durning, the 44-year-old founder and director of the Seattle-based Sightline Institute, an environmental and economic think tank. Back in 1999 — when gasoline briefly sold for under $1 a gallon, GM pushed 35,000 SUVs out of showrooms every month, and comedians joked that warming temperatures could be cured by switching from Fahrenheit to Celsius — Durning published a prescient 114-page book about resource conservation and job creation entitled “Green-Collar Jobs.”

In his book, which coined the term that became famous years later, Durning espoused an idea that is now part of the official conversation in Washington.

“A sustainable economy can generate employment just as well as an unsustainable one,” Durning wrote. “For every declining industry, like those that log old-growth forests, make farm chemicals, and build roads, there is an emerging one to take up the slack, like those that advise organic farmers, build windmills, and design walkable neighborhoods. A sustainable economy could be full of opportunity, and not only in these overtly green sectors.”

POSTED ON 15 Jan 2009 IN Biodiversity Business & Innovation Policy & Politics Science & Technology Sustainability Water North America 


As your post elaborates, Obama is employing environmental initiatives to stimulate the economy. As the owner and author of The Green Market (http://thegreenmarket.blogspot.com). I want to thank you for Environment 360's efforts promoting Green in 2008 and I would like to support your ongoing efforts for 2009. As the economy is in a free fall, Green is entering a critical stage in its life cycle and during this pivotal stage of transition, bloggers need to disseminate the facts about our environment and the role we can play in addressing these complex issues.

Best Regards,
Posted by SBC on 15 Jan 2009

The best article I have seen on this subject. By far the most insightful context offered.

Posted by John Laumer on 15 Jan 2009

"-how can we make a series of down payments-" is an encouraging perspective to help set the direction of the recovery. Rebuilding requires the same vision and priorities as building. In order to integrate renewable energy into the current energy mix, the first priority is the grid. Besides expanding the capabilities, these capabilities must be enhanced through upgrades and communication. Fortunately, some of the areas that offer good base load potential are areas that have missed out on the IT (broadband) focus and are areas starting to show "poverty creap". If the primary "down payment" for the grid is toward enabling communication, using the Rural Utilities Service of the USDA, a broadband network using a technoogy like wimax could be built in these areas. It would offer an immediate benefit to the regional economies and a long term base on which to upgrade the grid. If it was considered part of the energy mix, it might be partially financed using CREBs (Clean Renewable Energy Bonds) to enable national support. The real costs of different renewable sources should also be a primary consideration. The capacity factor (the percentage of energy a technology is actually able to produce compared to its rated amount) should be high priority. With a 30% capacity factor, requiring 100% backup from some other source and miles of special electrical transmission expansion, wind should not be at the top of the list. It can be a very viable part of the mix but doesn't merit a huge part of the "down payment".
Posted by Craig Collier on 16 Jan 2009

Alternative energy sources are imperative to the sustainability of our economies future! Please come and visit Valcent to see what we’re doing in efforts to promote algae biofuel. Come and see our commercial sized unit producing algae and turning into a valuable alternative energy source!
Jessica Brock

Posted by Jessica Brock on 16 Jan 2009


Look at the facts. The above link details all electric usage and generation in this country. Wind and Solar don't even make the list except when combined with landfill gas, and wood and a couple of others. What's more even with all the billions of dollars spent on wind and solar it does not appear that it is helping their total grow in any significant way.

Open your eyes to the facts: wind and solar are fantasy. Especially if your goal is to limit CO2 output or clean the air.

By the way, the ideal that solar and wind jobs can not be outsourced to China is just dumb. You think the Chinese can not make a solar panel or a windmill gear?
Posted by f1fan on 04 Mar 2009

Global warming is a theory that could never be proven by calculation or test and disagreed with history, science and common sense. The United Nations developed a program which claimed to prove global warming was real. For twenty years this program never accurately predicted anything. In early 2007 this program which has grown to seven programs predicted that unless there was a traumatic volcano eruption the earth's temperature would rise to a new high within a few years and it was absolutely certain that in spite of the known La Nina effect and the known lessening of solar activity, the earth would warm for the next 100 years.

The earth has cooled by historic amounts during the two years since these predictions.

We are now asked to finance hundreds of billions of dollars to correct a problem that does not exist with wind and solar which are so fluctuating that they require fossil fuel back-up 75% of the time for wind and 60% for solar. They require 100% back-up from these plants (no one can predict when the wind will not blow)so they cannot shut down one fossil fuel plant, they cannot add one kwh of capacity, they increase power costs by several times, do not save one drop of oil and cannot clean the air. Rubbing salt in the wound is the new "stimulus" package which gives NASA's James (Bush is censoring me) Hansen a cool $600 million to study "global warming" while we are freezing.

We are financing a non-solution to a non-existent problem with hundreds of billions of dollars and blocking 85% of our energy resources in an attempt to make these "alternatives" more competitive when they are unneeded, unaffordable and cannot add capacity. What could be more foolish?
Posted by Dahun on 16 Mar 2009

The technology of wind harvesting is fairly well established, though some improvements could be made especially in the electronics. Solar cells are coming along fine on their own, although it makes sense to explore the new arena of generating electricity from the infra-red spectrum; the key is rectifiers. There is no need for hydrocarbon fuel subsidies given today’s prices. There are probably some key areas of research in the “alternative” arena that make sense, but private development and the market seem to be doing pretty well. The best support any public entity could provide is to purchase and deploy the technology so that production can reach a takeoff point.
Posted by basmin on 26 May 2009

There is no need for hydrocarbon fuel subsidies given today’s prices. There are probably some key areas of research in the “alternative” arena that make sense, but private development and the market seem to be doing pretty well. The best support any public entity could provide is to purchase and deploy the technology so that production can reach a takeoff point.
Posted by club penguin on 05 Jul 2009

In Australia we face the same challenge. Clean energy full go ahead versus the economic recovery. Both can coexist but if Obama can maintain leadership it will help our progress as well.
Posted by Decor Stone on 06 Aug 2009

The average cost of electricity in the USA is approximately 12 cents per Kilowatt hour. In order for clean energy such as wind energy via wind turbines the pay back on the initial capital investment has to be shorter. The only way to shorten the pay back on capital investment is to either; 1. Decrease the cost of capital investment (or in this case the cost to put up a wind turbine(s)) or 2. Increase the cost of electricity so that selling back into the grid (from the wind turbines) will be more profitable. Cap and trade and/ or a carbon tax will essentially increase the cost of electricity making Obama's plan more likely to work... I hope it does.
Posted by Receptionist on 22 Aug 2009

The Idea of new so called green collar jobs sound great but can't be stated like this without further discussion. If new green collar jobs are created old "back" collar jobs (fossil resources) will either learn "green" or they will be unemployed.
The whole topic about renwable resources deals with energy almost exclusively! There is more (ok it's not more than 15% but still) use than for energy production! think of fine chemicals, polymers and pharmaceuticals. There is some potential for new technologies using renewable resources, too!
Posted by Zauberer Berlin on 27 Sep 2009

Excellent article,

I hope to see President Obama's ideals and goals actually come to fruition. I have been and continue to be a staunch supporter but have been a little disappointed in his ability to make his visions come to life. It seems like all his initiatives seem to get watered down as they pass through all the bureaucratic red tape. Lets hope that these initiatives do better, America is in great need of good jobs, and our planet needs help. Well, I guess the planet will always be o.k. but it would be nice for it to be able to support human life.
Posted by Pro Bono on 24 Oct 2009

Comments have been closed on this feature.
keith schneiderABOUT THE AUTHOR
Keith Schneider, a former national correspondent and regular contributor to the New York Times, is director of communications at the Apollo Alliance, a clean energy/jobs advocacy group based in San Francisco. In previous articles for Yale Environment 360, he wrote about how green planning has revitalized American cities and Barack Obama's clean energy priorities.



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