Renewable Energy, Energy Efficiency Will Be Key to Economic Recovery

By Bill Eby | November 03, 2008
As world leaders and their financial chiefs scramble to find ways to shore up credit markets and rebuild confidence in the global economy, many analysts and government leaders say that now is the best opportunity to implement renewable energy and energy efficiency initiatives that can drive and maintain economic recovery.

Recent and numerous calls for the next Congress and administration to forge a comprehensive national energy policy take on a new urgency in troubled economic times, and underscore a longstanding recommendation from the National 25x'25 Alliance for a renewable energy and energy efficient future that will boost the economy, as well as enhance national security and improve the environment.

"Through the creation of a 25x'25 energy future, we can stimulate the economy and put hundreds of thousands of Americans back to work," says Read Smith, co-chairman of the National 25x'25 Steering Committee. "Let's not bury our heads in the sand during these very challenging times. We have solutions that we can bring to the economic recovery table."

A national study undertaken by the University of Tennessee Department of Agricultural Economics shows that if America's farms, ranches and forestlands can meet 25 percent of the nation's energy needs with renewable resources biofuels, biomass, wind energy, solar power, geothermal energy and hydropoweran estimated $700 billion in new, annual economic activity would be generated, and 4 million to 5 million new jobs would be created.

The Tennessee study, commissioned by 25x'25, is said by its authors to be one scenario among many in meeting the 25x'25 vision. While the analysis includes forest waste from hazard-reduction programs and mill residue, there are numerous resources that are not taken into accountwoody biomass from managed forests, agricultural wastes (other than corn and wheat) and urban wood wastesuggesting the economic benefits of a 25x'25 future could be even greater. Further, while the analysis includes the production of dedicated energy crops, some varieties of feedstocks currently under research in laboratories and universities, including energy cane, Miscanthus and hybrid willow, may not have been fully evaluated in the analysis, indicating even greater economic returns.

Another strong indicator of renewable energy development's potential to strengthen the economy comes from the U.S. DOE, which looked at just wind energy and concluded that it is capable of becoming a major contributor to America's electricity supply and economy over the next three decades. The DOE says that achieving a 20 percent wind contribution to the U.S. electricity supply would increase annual revenues to local communities to more than $1.5 billion by 2030 and support roughly 500,000 jobs in the United States.

Developing Recommendations
When presented with those kinds of economic incentives, says 25x'25 Project Coordinator Ernie Shea, the alliance's steering committee developed a set of recommendations for a national energy policy that will not only reduce the nation's dependence on foreign oil and address climate change challenges, but will reinvigorate the economy and create new jobs. "The 25x'25 recommendations will lead to a comprehensive, long-term energy plan that will accelerate the production of all forms of renewable energy and create new renewable energy markets," Shea says.

Among the 25x'25 recommendations that directly address the current economic issues are the establishment of a mechanism to create a market for carbon, a change in the way utilities are regulated to give them a real incentive to aggressively pursue cost-effective energy efficiency, the expansion and extension of federal loans and loan guarantees for renewable energy production, the creation of incentives to accelerate the production and deployment of flexible-fuel and plug-in hybrid electric vehicles, and the modernization of the nation's power grid. The alliance also calls for an increase in federal research, development and deployment funding to accelerate the commercial implementation of renewable energy technologies.

Meanwhile, the Center for American Progress, a Washington, D.C., think tank and 25x'25 endorsing partner, says the United States can create 2 million jobs over two years by investing in a rapid "green" economic recovery program. In a recently issued report, the group says a $100 billion public/private investment package would create nearly four times more jobs, including a vast majority paying at least $16 per hour, than spending the same amount of money within the oil industry. It would also reduce the unemployment rate from the 5.7 percent recorded in July to 4.4 percent over two years.

The report, "Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy," which was prepared by the Political Economy Research Institute at the University of Massachusetts-Amherst under commission by the Center for American Progress, also shows that the proposed green economic recovery package would boost construction and manufacturing employment. The report says the green recovery program, at the least, can restore some 800,000 construction jobs lost over the past two years due to the housing bubble collapse.

John Podesta, president and chief executive officer of the Center for American Progress, says falling home prices, foreclosures, bank failures, a weaker dollar, steep prices for gas, food and steel, and layoffs in the banking, construction and manufacturing sectors are all indicators of serious economic strain. "What's more, evidence suggests the current downturn will continue for at least another year," he says. "At the same time, we face a growing climate crisis that will require us to rapidly invest in new energy infrastructure, cleaner sources of power, and more efficient use of electricity and fuels in order to cut global warming pollution."

Podesta says the time is now "for a new vision for the economic revitalization of the nation and a restoration of American leadership in the world" and "at the heart of this opportunity is clean energy, remaking the vast energy systems that power the nation and the world." He says the economic opportunities provided by a fundamental change in the way energy is produced and consumed are vast.

The $100 billion package envisioned by the center would include $50 billion for tax credits, $46 billion in direct government spending and $4 billion for federal loan guarantees. By comparison, U.S. crude oil imports during the first eight months of 2008 totaled $251 billion, according to the U.S. Bureau of Economic Analysis.

"The green economic recovery program addresses the immediate need to boost our struggling economy and accelerate the adoption of a comprehensive clean energy agenda," says Podesta, noting that combining tax credits and loan guarantees for private businesses along with direct public investment spending would retrofit buildings to increase energy efficiency, expand mass transit and freight rail, construct "smart" electrical grid transmission systems, and boost wind energy, solar power and advanced biofuels.

The report shows the vast majority of the 2 million new jobs would be in the same areas of employment that people already work in today, in every region and state of the country. For example, the report notes, constructing wind farms creates jobs for sheet metal workers, machinists and truck drivers, among many others. Increasing the energy efficiency of buildings through retrofitting requires roofers, insulators and building inspectors. Expanding mass transit systems employs civil engineers, electricians and dispatchers.

Investment Strategies for a Cleaner Environment
On another front, The Apollo Alliance, a coalition of business, labor, environmental and community leaders, and a 25x'25 endorsing partner, has released its own economic investment strategy the authors say will build a clean energy economy while cutting energy bills for families and businesses. Alliance officials say the plan will generate and invest $500 billion over the next 10 years and create more than 5 million "high-quality, green-collar" jobs.

"The New Apollo Program: Clean Energy, Good Jobs," which the alliance says is a collaboration among several labor unions, environmental groups, businesses, industry associations and socially responsible non-profit organizations, is a strategy designed to be carried out through initiatives such as establishing a national energy efficiency commitment to reduce energy use in new and existing buildings by at least 30 percent by 2025, improve efficiency by 20 percent in existing power plants and industries by 2025, restore America's manufacturing leadership to meet the demands of the clean energy future, establish a National Energy Innovation Fund to invest in the most promising new clean energy technologies emerging from our nation's laboratories, and train America's workers for the new clean energy economy.

The nation's mayors have joined renewable energy advocates in their calls for a "green" overhaul of the nation's economy. In a study from the U.S. Conference of Mayors Climate Protection Center, the U.S. economy currently generates more than 750,000 green jobsa number that the report projects will grow five-fold to more than 4.2 million jobs over the next three decades. The report establishes a "Green Jobs Index" and is the first calculation of its kind to measure how many direct and indirect jobs are in the new and emerging U.S. green economy.

"This report proves that being green is not optional, it is necessary for a healthy and robust economy," said conference President Manny Diaz, the mayor of Miami. "Creating green jobs is an investment we must continue to make."

Prepared by Global Insight Inc., the report found that more than 400,000 of current green jobs identified in the study are in the engineering, legal, research and consulting fields, highlighting the important role supportive or "indirect" jobs play in moving the economy toward energy independence. Renewable power generation maintains 127,000 jobs, while agriculture and forestry provides 57,500 jobs.

Under assumed scenarios and with government commitment and investments, the report projects green jobs could contribute 10 percent of all new jobs through 2038, representing the fastest-growing job segment in the U.S. economy. By 2038, the report forecasts that renewable electricity production will create 1.23 million jobs, alternative transportation fuels will give rise to 1.5 million jobs, engineering, legal, research and consulting will account for more than 1.4 million positions, and commercial and residential retrofits will generate 81,000 jobs.

While recent news accounts focus on the difficulties faced by national economies around the world, some encouragement is offered by news from the United Nations Environmental Program that an estimated $148 billion was invested in new wind, solar, biofuels and other alternative energy development around the world last year, a spike of nearly 60 percent increase more than the $92.6 billion spent on such projects in 2006. U.N. officials say the upsurge in investment, which they describe as a "green energy gold rush," has been gaining speed the past few years because of rising concerns over climate change and energy prices. In 2005, some $58.5 billion in new money was invested. EP

Bill Eby provides communication and media support for 25x'25. Reach him at or (512) 940-8990.