I can still see my youngest child at age 5 going through the toy catalog before Christmas circling the toys that he hoped to get. He painstakingly examined every item and circled every single one—page after page. He decisions were unconstrained by costs.

The current recession is bad news for two reasons. The first and most obvious is that we are not producing so much, but the second is that it has unleashed a free-lunch feeding frenzy. We can circle everything. Government expenditures no longer have cost—only benefits.

Or, in the barest nod to opportunity cost, we rank programs not for the value of what they deliver, but for how hard they promise to make us work. Thus, the Center for American Progress/Political Economy Research Institute study justifies a $100 billion program because it offers “a relatively high proportion of lower, entry-level jobs” that have a “higher labor intensity” and pay “about 20 percent less than the average for those connected to the oil industry.”

First, I don’t know of anybody offering to fund a $100 billion government-financed petroleum stimulus package. Second, as the CAP/PERI authors acknowledge, you get a lot more energy from $100 billion worth of petroleum. But most important is the general thrust. Over the centuries, our economic progress has been driven by higher and higher capital intensity. Higher labor intensity is movement in the wrong direction. Finally, taxing or borrowing the $100 billion will destroy jobs in those parts of the economy that will now be denied the resources.

Do many of the recommended programs have value? Of course they do. Is weatherization a good idea? In many cases the answer is “yes.” That’s why I put insulation in my house in 1987. But we don’t need a government program to motivate consumers and businesses to save money.

Are there benefits from upgrading the electric grid? Absolutely. But we have prices and markets to help measure costs and benefits. Are the much regulated electric markets ill-suited to take full advantage of these efficiencies? Maybe. But the criterion is benefits over costs. The same criterion that holds when there is no recession.

There are many promising new energy technologies and many promising uses of existing technologies. But dressing energy programs in stimulus clothing can let policy dogs slip past the gate.

Here is my proposal:

Opening access to our own energy resources costs the government nothing (in fact it generates lease and royalty revenues); lowers real energy costs; increases real household income; and makes our domestic industries more competitive. Now that is a stimulus package.

Many are suggesting heavy federal investment in greener energy sources, but fail to accurately measure the impact of replacing lower cost conventional energy sources with the higher costs of renewable sources.

Despite many years of taxpayer funded R&D and tax credits, most forms of renewable energy are still not competitive with electricity generated by coal, natural gas or nuclear power. The reason for the limited penetration of renewables is cost. Wind powered electricity is estimated to cost as much as 50 percent more than coal-fired generation and solar generation as much as 700 percent more. Wind and solar are that both have to be backed up by conventional generation capacity since the wind does not always blow and the sun is available only 12 hours a day. Furthermore, renewable resources are often geographically remote and building transmission lines to large metropolitan areas is expensive, as highlighted in a 2008 report by the U.S. Department of Energy’s Energy Information Administration. Moreover, the switch to hybrid and all electric vehicles vehicles is hampered by technology and cost constraints.

While we need all types of energy, renewables are not expected to increase their share of U.S. energy production to much more than the current level of 7 percent by 2030, according to the U.S. Department of Energy. Furthermore, the U.S. does not have the trained engineers and manpower to spend additional billions of dollars on renewables productively over a short term.

U.S. economic growth and energy use go hand in hand; each 1% increase in GDP is accompanied by a 0.3% increase in energy use. Policymakers therefore need to promote U.S. energy supplies of all types and avoid unrealistic climate change policies that will further dampen our already struggling economy. The higher costs of renewable energy sources and the dramatic impact that a cap and trade system would have on energy prices, jobs and household incomes are a one-two punch that the U.S. economy does not need. Allowing increased access to both off-shore and on-shore areas for drilling and exploration would also have a positive impact on U.S. energy supplies.

Clearly, if we are to take advantage of renewable energy in the generation of electricity, we will need to build a new high-voltage transmission network that carries the power from the rural, sparsely populated areas where most renewable energy is produced to the urban areas where the electricity is needed. The use of renewable energy to generate electricity is already being constrained by the nation’s antiquated electric grid. Currently, almost 300,000 MW of wind projects, more than enough to meet 20% of our electricity needs, have been proposed but have not moved forward in part because there is insufficient transmission capacity to carry the electricity they would produce. Accomplishing this will cost an estimated $60 billion, which represents a 24% increase in our annual investment in transmission. But these costs will be more than offset by lower electricity costs. For example, electricity consumers in the Northeast now pay higher electricity costs because there is no transmission system to bring lower-cost power east from other areas of the country. A new transmission system would address this deficiency. Using renewables to generate electricity would also put downward pressure on natural gas costs, providing further benefits to consumers in many parts of the U.S. A new transmission system using high-voltage lines would lower electricity costs because these lines are much more efficient than existing lines, and cost less to build. They also take up less space: one modern high-voltage line can carry six times as much power as older lines. A number of studies have documented that the costs of transmission investments to integrate wind power and other renewables are significantly outweighed by the consumer savings that those investments produce. A 2006 study by the Electric Reliability Council of Texas (ERCOT) found that, over time, an investment in new transmission infrastructure for renewables would produce savings many times larger than the cost of the investment. The study found that the smallest transmission investment plan would bring enough new wind energy online to save $1.2 billion per year in fuel costs – enough savings to cover the $3.8 billion cost of the transmission infrastructure in a little over three years. The new wind brought online by the next largest transmission plan would save $1.7 billion per year in fuel costs, repaying the $4.9 billion cost of the investment in 2.9 years. So the real issue is not the cost. Building a new transmission system will require major changes in the way transmission is regulated and financed. The policy and regulatory structure that governs the transmission industry is obsolete for today’s electric industry needs. Many of these transmission policies are relics of the era when utilities primarily served customers in their state using generation in that state, so there was little need for strong transmission links to other states. As a result, the system of having regulators in each state evaluate transmission proposals based on benefits to that state alone worked adequately in that business environment. With the introduction of competition into wholesale electricity markets in the last decade, electricity is increasingly sold across state lines. But the regulatory environment for transmission investment has not kept pace with this change in market structure. The result has been sustained underinvestment for decades in an increasingly congested transmission grid that is now being used to move power in ways that it was not designed to accommodate. As one would expect, a balkanized patchwork of regulations has produced a balkanized patchwork of an electric grid. To solve this problem, our organization and others in the energy sector are advocating a comprehensive set of policy changes that will require action by Congress, federal regulatory authorities, the President, and state officials. The President must declare a new transmission system to be a national priority, and direct federal regulators to adopt the necessary policies and regulations. If the federal regulators need new authority, Congress will have to pass it. Some financial incentives will also likely be needed, We have detailed the full range of policy reforms at www.newwindagenda.org. The good news is that there is already a growing consensus that this new transmission network is needed, and that sentiment will help create the political will to get the job done.

We are all so focused on growing renewables that we are not thinking about the practical limits to that growth. Everyone appears to have accepted the need for more renewables along with a continuing role for our traditional fuels. What we are arguing now is the pace. It is axiomatic that there are real limits to how fast we can build wind, solar, hydro, and biofuels, but it is unusual for the debate to center around what those limits are. A blind push toward such fuels could have unintended consequences that will backfire on us.

For instance, negotiating for land to site an upgraded electric transmission grid takes time because you are dealing with a human who wants to make sure he or she gets the best deal. You can speed up that process by condemning the land, assuming the right of eminent domain, but as a society do we really want to go in that direction? Likewise, we can speed up the installation of solar panels on everyone's home--or alernatively a geothermal plant in the ground underneath--by providing everyone in the country a $30,000 tax credit, but that crush of orders would create upward pressure on the price of solar panels, installers, and geothermal equipment. It is certainly true that a renewable push will stimulate the economy, but as a practioner in the natural gas business I can tell you that boom and bust cycles create dislocations and disequilibriums that make consumers unhappy. We are about to discover that ALL energy forms, including renewables, have an infrastructure cost that affects people in more ways than just their pocketbooks. Growing toward a renewable future with a cognizance of the limits of that growth would serve us well.

From perspective of State utility regulators, creating jobs and stimulating workable renewable energy resources are two key measures of success. Many regulators judge their own performance on the economic strength of their State. Are new businesses relocating in their borders? Are large industrial businesses expanding operations? Maintaining and creating jobs are sure signs of a healthy regulatory environment.

Green energy plans will be held to the same standard. States are already taking the lead by promoting clean energy in various ways, and we are starting to see the benefits throughout the country. In fact, Monday’s New York Times featured an article (http://www.nytimes.com/2008/11/28/us/28wind.html?_r=1&ref=science) detailing the rush in Wyoming for plots of land for developing wind-energy farms. We have seen similar initiatives in Texas, New York, and other parts of the country where State governments are promoting and encouraging development of green energy resources.

Any national framework for infrastructure investment developed by the Obama Administration should recognize the lessons at the State level and allow States to continue their own programs. This is perhaps a cliché. States are the nation’s “Laboratories of Democracy;” While federal financial investment will be critical, sustainable jobs can be created through a bottoms-up entrepreneurial spirit rather than through a top-down, federal mandate. New federal rules and regulations should not be one-size-fits-all and must recognize that States do not necessarily have the same renewable resources available.

As far as expanding the transmission grid, certainly new investment in new capacity will be necessary. States well understand these needs, and accordingly, are doing their due diligence and approving new lines where needed. In many regions of the country – Texas, the Midwest -- innovative State policies have spurred substantial new renewable development. Texas’ Competitive Renewable Energy Zones is one example of a successful project that encouraged wind development and additions to the grid to accommodate the new sources of energy.

States and regional institutions are actively working together to ensure that the grid is able to deliver new sources of power. It is important to note that building new lines is not the only answer, and giving the federal government a larger role in transmission siting would certainly result in unintended consequences. Before putting steel towers in the ground and wires in the sky, all alternatives must be considered.

On top of this, States are also moving ahead with new Smart Grid technologies that aim to make the transmission system more efficient and reliable. If we can get more out of the system we have, we can reduce the need for new towers and attendant siting disputes.

America’s complex energy and environmental policy must be developed in a manner that serves multiple goals: meeting growing electricity demand in the most environmentally responsible way and without doing harm to economic competitiveness, enhancing energy security and incenting the next wave of technological advancement in energy production, transmission and metering that will serve Americans for generations to come. There is little question that the “all of the above” approach to energy efficiency, conservation and production is the right path, and balancing our fuel sources is more important than ever. In this context, the Obama Administration and Congress should grow the portfolio of low-carbon sources, including renewable energy applications and nuclear energy. Clearly, nuclear energy has a vital role to play in helping America achieve energy independence by reducing our reliance on fossil fuels while also protecting the environment. Nuclear energy is the only carbon-free source of reliable, baseload electricity that can be expanded on a large scale to meet the rising demand for electricity. Building new nuclear plants will also help the economy. For consumers, nuclear power plants generate power at reasonable rates due to low fuel and overall production costs—cheaper than coal plants and three times cheaper than natural gas power plants. Construction of advanced nuclear plant technology will generate tens of thousands of direct jobs in addition to other economic stimulus at those locations where new reactors will be built. During the four to five year construction period, a plant will employ 1,500 to 2,500 skilled trades workers. During operation, the plant will be staffed by 400 to 700 full-time employees with above average wages and benefits. The economic benefits of nuclear plants spill over to the surrounding communities. The 400 to 700 permanent jobs at a nuclear plant create an equivalent number of additional jobs in the local area to provide the goods and services necessary to support the nuclear plant work force (e.g., grocery stores, dry cleaners, car dealers, etc.). Each year, an average nuclear plant generates $430 million in sales of economic output (goods and services) in the local community and nearly $40 million in total labor income. It also provides $20 million in total state and local tax revenue each year and federal tax payments of about $75 million each year. The addition of each new nuclear plant will magnify this impact. In terms of environmental benefit, each nuclear plant prevents 7 million metric tons of carbon dioxide, 10,000 tons of nitrogen oxides and 32,000 tons of sulfur dioxide each year. The nation’s 104 reactors have been vital to meeting Clean Air Act standards for controlled pollutants and they will be equally important to meet emerging national and regional carbon reduction goals. In addition to lowering the carbon profile of the energy sector, new reactors can power plug-in hybrid electric vehicles and reduce greenhouse gases from the transportation sector. The Obama Administration and Congress will have an opportunity to make energy and environmental policy a top priority and to increase our energy security. Both should approach these issues thoughtfully, but with a sense of urgency given that our electricity infrastructure over the next two decades requires the most significant investment ever –approximately $2 trillion. We must begin that task now because it will take time to build the energy infrastructure that will help power our economic recovery and our future global competitiveness. America’s complex energy and environmental policy must be developed in a manner that serves multiple goals: meeting growing electricity demand in the most environmentally responsible way and without doing harm to economic competitiveness, enhancing energy security and incenting the next wave of technological advancement in energy production, transmission and metering that will serve Americans for generations to come. There is little question that the “all of the above” approach to energy efficiency, conservation and production is the right path, and balancing our fuel sources is more important than ever. In this context, the Obama Administration and Congress should grow the portfolio of low-carbon sources, including renewable energy applications and nuclear energy. Clearly, nuclear energy has a vital role to play in helping America achieve energy independence by reducing our reliance on fossil fuels while also protecting the environment. Nuclear energy is the only carbon-free source of reliable, baseload electricity that can be expanded on a large scale to meet the rising demand for electricity. Building new nuclear plants will also help the economy. For consumers, nuclear power plants generate power at reasonable rates due to low fuel and overall production costs—cheaper than coal plants and three times cheaper than natural gas power plants. Construction of advanced nuclear plant technology will generate tens of thousands of direct jobs in addition to other economic stimulus at those locations where new reactors will be built. During the four to five year construction period, a plant will employ 1,500 to 2,500 skilled trades workers. During operation, the plant will be staffed by 400 to 700 full-time employees with above average wages and benefits. The economic benefits of nuclear plants spill over to the surrounding communities. The 400 to 700 permanent jobs at a nuclear plant create an equivalent number of additional jobs in the local area to provide the goods and services necessary to support the nuclear plant work force (e.g., grocery stores, dry cleaners, car dealers, etc.). Each year, an average nuclear plant generates $430 million in sales of economic output (goods and services) in the local community and nearly $40 million in total labor income. It also provides $20 million in total state and local tax revenue each year and federal tax payments of about $75 million each year. The addition of each new nuclear plant will magnify this impact. In terms of environmental benefit, each nuclear plant prevents 7 million metric tons of carbon dioxide, 10,000 tons of nitrogen oxides and 32,000 tons of sulfur dioxide each year. The nation’s 104 reactors have been vital to meeting Clean Air Act standards for controlled pollutants and they will be equally important to meet emerging national and regional carbon reduction goals. In addition to lowering the carbon profile of the energy sector, new reactors can power plug-in hybrid electric vehicles and reduce greenhouse gases from the transportation sector. The Obama Administration and Congress will have an opportunity to make energy and environmental policy a top priority and to increase our energy security. Both should approach these issues thoughtfully, but with a sense of urgency given that our electricity infrastructure over the next two decades requires the most significant investment ever –approximately $2 trillion. We must begin that task now because it will take time to build the energy infrastructure that will help power our economic recovery and our future global competitiveness.

We can lift ourselves out of this economic crisis through clean energy solutions that create new jobs and solve global warming. A recent report released by the Political Economy Research Institute at the University of Massachusetts found that investing in clean energy solutions such as wind and solar power, rapid transit, and energy efficiency could create 2 million U.S. jobs in the next 2 years—nearly 4 times as many jobs as would be generated by investing in more oil production. Two million jobs in just 2 years is the kind of rapid response we need right now. We can accomplish this by enacting an economic revitalization plan to make major investments in the nation’s clean-energy and transportation infrastructure WITHOUT increasing the federal budget deficit. Instead, we will generate clean energy capital by enacting clear limits on global warming pollution and requiring polluters to buy permits for each ton they release. We can direct those revenues into expanding green energy industries, such as manufacturing wind turbines and building more efficient cars. An even larger portion of the auction revenues would be issued as dividends to Americans to help alleviate higher energy costs and encourage people to invest in the efficient windows and appliances that will drive down their utility bills.

President-elect Obama is absolutely right to focus on renewable energy and the green economy as a vehicle to help restart this nation’s economic engine. Renewable energy industries, whether for the generation of electricity or the production of liquid transportation fuels, are on the cusp of major technological breakthroughs that will transform our energy and environmental future.

In designing an economic stimulus package that focuses in part on green jobs, President-elect Obama should stop and take stock of the platforms that exist today upon which the green economy can be expanded. An excellent example is the federal tax incentive for ethanol use. The blenders’ credit, as it is known, is a tax credit available to gasoline refiners and blenders for each gallon of ethanol they use – a demand-focused incentive. It has helped establish a growing domestic renewable fuels industry, today displacing 8% of the nation’s gasoline supply. It has been instrumental in creating hundreds of thousands of new jobs and helped save drivers money at the pump. In addition, the tax incentive has helped reduce dependence on foreign oil, cut our trade deficit, made the federal government money, and put more money into the pockets of average Americans. It is the original green economic stimulus and one that continues to work today.

In addition, federal standards and requirements for the use of renewable energy, such as the Renewable Fuels Standard, are providing a solid foundation upon which renewable energy industries are growing and maturing. In particular, the greenhouse gas emission reductions and volumes of renewable fuel from cellulosic materials contained in the RFS are laying the groundwork for the emergence of the next generation of ethanol technologies which promise even greater economic and environmental benefits than we are realizing today. Continuing these sound public policies should be at the top of President-elect Obama’s blueprint for the green economy.

Beyond ensuring the continuance of pragmatic and responsible public policy, additional investment in research and development by the federal government is essential to accelerate the commercialization of new technologies that promise to create more new jobs and greater economic opportunity. Federal grants, loan guarantees, and other investment tools must be employed to bring these technologies to fruition.

President-elect Obama must also take into account policies that increase the demand for renewable energy sources and technologies. On the transportation fuels front, increasing the current arbitrary 10% limit on the amount of ethanol that can be included in a gallon of gasoline would ensure the continued growth and evolution of America’s ethanol industry. Likewise, an increase in the production of flex fuel vehicles (FFVs) would create even greater demand for renewable alternatives to gasoline and imported oil.

Striving to create more opportunity in the renewable energy sector is about more than just the jobs that directly produce the energy. It is about the network of suppliers and distributors which provides goods and services to these industries. For example, a 100 million gallon per year ethanol biorefinery will directly employ about 50 people. However, such a facility will help support 1,500 jobs across the economy. It is about the revival of many sleepy rural communities that are often home to the renewable energy industry.

Expanding America’s domestic renewable energy sector is also about the academic opportunities that will open to more high school and college students as they prepare for careers in engineering, math and the sciences. It is an opportunity to reassert America’s academic strength and provide future generations the same kind of exciting, rewarding, and essential career opportunities that were available to the generations who have made America what it is today.

President-elect Obama is absolutely right in placing emphasis on renewable energy and fuel technologies. The green economy – and its corresponding economic and academic opportunities – is a platform for long term sustainable economic growth as well as a key component of our energy, national security, and environmental strategies.

A discussion of green energy seems to addle the brains of many sensible people, leading them to propose policies that are bad engineering and science or have a foundation in yearning for utopia. Many of us love renewable energy. However, even this wonderful idea requires a hard look to see what is sensible now and why some current and proposed policies are likely to be costly, anger many people, and undermine the reliability of our electricity system. Congress needs to understand some facts before voting for a national renewable portfolio standard (RPS).

A national RPS is a bad idea for three reasons. First, "renewable" and "low greenhouse gas" are not synonyms; there are several other practical and often less expensive ways to generate electricity with low carbon dioxide emissions. Second, renewable sources such as wind, geothermal, and solar are located far from where most people live. This means that huge numbers of unpopular and expensive transmission lines would have to be built to get the power to where it could be used. Third, since there doubt that all the needed transmission lines would be built, a national RPS without sufficient transmission would force a city like Atlanta to buy renewable credits, essentially bribing North Dakota to use their wind power locally. However, the abundant renewable resources and low population in these areas mean that supply could exceed local demand. Although the grid can handle 20% of its power coming from an intermittent source such as wind, it is well beyond the state of the art to handle 50% or more in one area. At that percentage, supply disruptions become much more likely, and the highly interconnected electricity grid is subject to cascading blackouts when there is a disturbance, even one in a remote area.

Impatience to solve current problems has resulted in aggressive renewable portfolio standards with strict deadlines. Although renewable technologies will help attain social goals, mandating rapid, massive deployment of these technologies will result in high cost, disputes over land use, and unreliable electricity, leading to a public backlash against these policies. The United States needs to focus on the goals, provide substantial incentives to meet them, and avoid polices that exclude economical ways to meet the goals.

Renewable energy sources are a key part of the nation's future, but wishful thinking does not provide an adequate foundation for public policy. The national RPS that gathered 159 cosponsors in the last Congress would be expensive and difficult to attain; it could cause a backlash that might doom renewable energy even in the areas where it is abundant and economic.

Rather than specifying a winning technology, Congress and state legislatures should specify the goals—reduce pollution and greenhouse gas emissions, enhance energy security, maintain electric supply reliability, and control costs—and provide incentives to reach them. Since no current technology meets all goals, legislators must consider tradeoffs. Specifying the goals,rather than the technologies will lead to a technology race that will serve society.

Instead of enacting a national RPS, Congress should:

· Handle conventional pollution discharges through legislation and the Environmental Protection Agency.

· Handle greenhouse gas emissions through legislation such as a carbon tax or a cap-and-trade system that addresses such emissions explicitly.

· Handle energy security through energy efficiency programs such as equipment performance standards and consumer incentives and through maintainance of a high petroleum price.

· Maintain reliability through close monitoring of the new Electric Reliability Organization and of generating capacity and demand.

· Control costs through efficiency standards and encouraging a diverse portfolio of generating fuels, but avoid mandates to deploy expensive technologies. Rather, it should allow the market to determine the least-cost generation.

A green energy plan that also produces jobs presents an opportunity to simultaneously address three strategic problems: a stalled economy, global warming, and energy insecurity. Wind power can be a centerpiece of this energy triple play.

Wind is already generating enough electricity to serve more than six million homes. It also has produced an estimated 60,000 jobs, with the promise of more in the future. The U.S. Department of Energy said earlier this year that wind could generate as much as 20% of U.S. electricity needs, and would support 500,000 jobs. Jobs resulting from wind power include construction, operations and maintenance, transportation, as well as manufacturing. (Nearly half of wind turbine components are now manufactured in the United States.) The only restraint on wind power’s growth is the right combination of policies. To promote wind and other renewables, and create green jobs, we need several policy changes. First, in contrast to the series of one-year incentives that discourage investment in the US wind industry, a long-term renewable energy tax incentive would provide needed stability and attract billions of dollars in investment. Second, a renewable electricity standard that calls for utilities to generate a certain percentage of their electricity from renewable energy would also boost demand for wind energy. (President elect Obama has called for a 25 percent standard by 2025 and a 10 percent standard by 2012. ) Third, tough climate change legislation would reduce global warming and help wind energy at the same time. Finally, a new, high-voltage transmission network is needed to carry electricity produced by wind and other renewables to electricity demand centers. That is an ambitious policy agenda. But to meet the jobs, environment and energy challenges facing the United States, we must think boldly--and act quickly.

Many of our experts are suggesting green energy plans that would dramatically increase the use of solar, wind, and other renewable sources of electricity. Does that require massive improvements in the electricity grid? How can the nation reach that goal?

Our nation needs a comprehensive and balanced approach to energy shaped by reason, common sense, and experience--one that embraces the promise of green technologies while finding ways to diversify and improve our traditional energy resources. This reality-based approach would encourage development of all domestic energy sources: alternatives like solar, wind and geothermal, and also traditional forms of energy like natural gas, oil, nuclear and coal.

Every respected energy study on future demand comes to the same conclusion about the next several decades: we need all the energy we can produce in an environmentally responsible manner. We cannot afford to focus on just one energy source to the exclusion of others. Nor can we depend upon sources that are neither fully developed nor ready to compete in the energy marketplace.

It is hard to overstate the energy needs we must meet. The U.S. Energy Information Administration (EIA) estimates that sustaining a 3 percent rate of annual growth in the global economy to 2030 will require an expansion of crude oil the equivalent of the current combined consumption of the U.S. and China. The growth in demand for natural gas worldwide is expected to be even larger. Even with significant growth of alternatives and improvements in energy efficiency, oil and natural gas will meet more than half of the world's energy demand in 2030--or roughly the same as today.

The oil and natural gas industry is answering the call for increased energy supplies and is creating the green jobs desired by our society. We are conducting 65 percent of the R&D on future energy resources. Our innovative scientists and engineers are working to build increasingly efficient wind and solar power systems and to create the fuels of the future. These new green jobs are complementing those of the 6 million people who already have well-paying jobs linked to America's oil and natural gas industry.

At this time of financial uncertainty, it would be wise to heed the counsel of President-elect Obama to "resist the temptation to fall back on the same partisanship and pettiness and immaturity that has poisoned our politics for so long." We need to rise above the all-or-nothing attitudes of the past and come together to prepare us for the next four years and beyond, as we restore our economic strength and shape our energy future.

The scale of the global marketplace for energy technologies is as large as the computer and IT industry that creates 35 million jobs globally. All that marketplace needs is a spark, which President-elect Obama and the new Congress have the power to deliver.

We’re already seeing just a fraction of the clean energy revolution’s potential realized. In 2006, the renewable energy and energy efficiency industries generated 8.5 million jobs and nearly $970 billion revenue in America.

The jobs that benefit from the clean energy industry touch every aspect of America’s economy. As our transportation, buildings, and energy infrastructure are retooled to be cleaner and more efficient, work in these and related industries will increase. According to the American Solar Energy Society, 98 percent of renewable energy and energy efficiency jobs are jobs workers already know how to do – from manufacturing and engineering to truck driving and accounting.

America should drive the clean energy revolution; we cannot afford to take a back seat. The world's solutions to global warming carry the "made in America" label. Digging out of our economic mess with a green shovel is a start, but President-elect Obama and the new Congress need to follow that stimulus package with legislation to curb our carbon emissions by the amount scientists say is necessary to avoid the worst impacts of global warming.

According to the Department of Energy, global warming legislation like the Climate Security Act considered by the Senate last June would save Americans $180 billion through the year 2030 on foreign oil expenditures. Imagine how much happier our holidays would be if we were spending that money at the mall or on our mortgages instead of at the gas pump?

My colleague Bracken Hendricks and I described a Green Prosperity Path in this article: http://www.americanprogress.org/issues/2008/11/green_prosperity.html

Here are the highlights.

A stimulus program is a vital step toward economic health, but it is not the only one. The four steps needed to achieve long-term economic health and prosperity are stabilization, stimulus, recovery, and growth. The stabilization and stimulus efforts would achieve immediate relief with a prompt injection of funds into auto loans and existing energy programs. The recovery and growth phases would launch new programs and expand existing ones to achieve medium- and long-term growth.

The average clean energy investment generates nearly four times as many jobs compared to spending on fossil fuels, according to "Green Recovery," a recent study by the Center for American Progress and the Political Economy Research Institute at the University of Massachusetts. CAP and PERI determined that a $100 billion investment in clean energy policies would yield 2 million jobs in two years.

The four phases to long term economic health.

Stabilization: A more efficient auto industry

The auto industry is suffering from an extended, steep sales slump, and it requires immediate stabilization. The auto industry is a bedrock of the economy, with “one in 10 American jobs related to auto manufacturing.” Its survival is essential for the future of advanced clean vehicle and energy manufacturing.

The federal government should grant their request for a $25 billion "bridge" loan to keep them in business while credit thaws for consumers. This loan package must prevent excessive executive compensation. The companies' recovery plans must base their business on model on building supper fuel efficient cars.

The auto companies must honor commitments to provide health care and retirement security for their employees. And they must continue their research and development of advanced fuel-efficiency technology.

The auto companies should also cease their efforts to block more efficient fuel economy standards or the California motor vehicle greenhouse gas emission standards.

General Motors Corp., Ford Motor Co., and Chrysler can also apply for loans from a $25 billion fund to help them retool their factories to make vehicles that are 25 percent more fuel efficient. These loans should NOT be diverted for the bridge loans that the Big Three seek. First, other companies hope to tap these funds to build super efficient cars. Even if the retooling fund is eventually replenished, draining the fund now would only further delay the conversion of factories to the production of super clean cars, putting US companies further behind their foreign competitors.

Stimulus: Fund existing efficiency and green job programs

An effective stimulus would immediately put funds into programs with an existing and effective delivery mechanism so that businesses or households could promptly spend the money. The Center has identified many existing programs that meet this criterion. These proposals include the following:

* Fully fund the Weatherization Assistance Program to weatherize low-income households. The full funding amount of $900 million would increase efficiency in 400,000 households.

* Provide $2 billion in assistance to transit agencies to reduce transit fares and expand services, and begin construction on ready-to-go rail and other projects.

* Increase appropriation to $6 billion for block grants to states, cities, and counties for clean energy projects.

* Fully fund the manufacturing extension partnership program that helps small- and mid-sized industrial plants increase their energy efficiency.

Recovery: New spending and clean energy programs

Confronting mounting energy and global warming problems presents an extraordinary opportunity to reinvigorate the economy through investment in clean, sustainable, low-carbon energy technologies. Unlike the stimulus program, recovery efforts can include a mix of existing and new programs, and extend beyond a few months.

* Create a “Clean Energy Corps” to train young people for the clean energy jobs of the future, such as installing solar panels, weatherizing homes, and retrofitting other buildings.

* Invest $1.1 billion to demonstrate carbon capture-and-storage technology at coal-fired power plants.

* Invest in installing solar electricity in federal buildings.

These and other programs would sustain and increase employment in the renewable, manufacturing, and construction industries. They would also reduce oil and energy use, making our economy more efficient, and they would cut global warming pollution and its associated costs.

Growth: Reduction in greenhouse gases to spur long-term prosperity

A federal global warming program that caps and reduces emissions would benefit the economy in two ways. First, it would help the United States avoid the enormous costs of unchecked global warming, including damage from fiercer storms, and more illnesses, drought, and floods. A carbon cap-and-trade program would also spur significant new investment in clean energy technologies including renewables, energy efficiency, and carbon capture and storage.

A cap-and-trade program that auctions all pollution allowances would yield significant revenues to offset higher energy costs for middle and low income families, and to invest in clean energy industries.

Several other programs would also help spur long-term growth and a reduction in oil and energy use, among them:

* A Renewable Electricity Standard so that utilities generate 20 percent of their electricity from wind, solar, geothermal, and other renewable energy sources. Twenty-eight states have similar programs.

* An Energy Efficiency Resource Standard to require utilities to achieve a certain reduction in electricity use. Eighteen states have such programs.

These short-, medium-, and long-term investments in energy efficiency, renewable energy, and global warming abatement would create millions of well-paying jobs. They would also move the country toward the low-carbon future necessary to increase our international competitiveness, improve our national security, and avoid the devastating social, economic, health, and environmental effects of global warming. Adopting and implementing these programs is the clear path forward to short term stimulus and long term growth.

There is wide-spread support for developing as much new renewable energy as can be developed in a practical and efficient manner. Moreover, there is broad support for creating as many “green jobs” or any other type of jobs that we can create. OK, now we are done with the platitudes so what do we do?

First of all; do no harm. We have a weak economy and we cannot abruptly reduce our dependence on fossil fuels while we hope to greatly increase renewable energy. Rather we need to appreciate that the experts predict that the use of fossil fuels will continue to increase past 2050, as will renewable fuels, but we need both to run our economy. So any energy policy needs to increase domestic production of fossil fuels while increasing our energy from renewable fuels. To begin steep reductions in our use of fossil fuels with the hope that such energy reductions will be made up with sufficient quantities of renewables will place our country at serious economic and security risk.

Second, American business has created millions of “green jobs” for decades. In 1980 it took 20,000 BTU’s to create a Dollar of GDP; today it takes just 8000 BTU’s. That is a lot of green jobs to create all that energy efficiency and the products and equipment associated with it. So let’s keep on this path but remember while we are more efficient in how we use energy: we just use more of it because there are more of us, using more appliances, computers and driving more cars.

Thirdly, any plan to create “green jobs” must define what a “green job” is so we just don’t move jobs from one category to another. Moreover, when thinking of “green jobs” let’s be expansive and include nuclear; it does not produce greenhouse gases so that should be as green as it gets? We need all the “green jobs” we can get, not just some.

Fourth, we need to desperately expand our electricity grid so it can deliver green wind energy from the plains to Chicago and green sun from New Mexico to California and yes even green nuclear to almost everywhere that needs more energy. And along the way let’s make the new grid and the old grid smarter, more efficient and more interactive with the consumer. A smart grid would actually educate humans about energy use.

Fifth, let’s not burden the system with more and more government regulation like a mandatory federal renewable energy portfolio which will merely penalize states that do not have renewable resources and benefit those states that have more sun or wind. We need to focus on the big stuff like developing the energy resources and the grid to transmit the energy to the places it is needed and avoid the small stuff like a renewable portfolio standard that generates nothing but fierce fighting depending on location and source of energy resources.

Finally, and most important we need to fully recognize that the biggest impediment to expanding our renewable energy resources is the same impediment that blocks expanded use of domestic fossil fuel resources; it is the NIMBY (Not In My Back Yard) syndrome which is focused on stopping as much energy development as possible. Even before the attack on fossil fuels subsides, there will be a NIMBY attack on renewable energy resources since windmills kill birds, ethanol uses too much water or produces too much ozone or the nuclear waste cannot be stored. So if we truly want green energy (energy that does not produce greenhouse gases) any new policy must incorporate a permit streamlining process that quickly allows renewable energy projects to be built and placed into service so we have the energy we need to run our nation and all the businesses and homes in it.

From a stimulus point of view, we need things that can be quickly scaled. And from a bang for the buck point of view we need activities that will call upon supply chains that currently have excess capacity.

Sadly, the latter criteria doesn't do much to narrow our choices -- demand is slacking across the board. So the President's main challenge is find activities which are ready-to-go and scalable.

Here's a sample:

Public building retrofits for energy efficiency. Loans to cities and states could generate jobs this year, and lower utility bills dramatically starting next year.

Retrofit the federal power projects with 20,000 mw of wind and solar capacity. Many of the existing dams and reservoirs are producing electricity at a fraction of design because of siltation and drought -- the Pick-Sloan system on the Missouri delivers only 10% of its design capacity. Because federal cost of capital is low, transmission lines already exist, and power authority reservations are available for siting, these projects could be under construction very quickly -- and the hydro capacity which these dams have could then be used to backfill when wind and solar power is interrupted.

Finish the jobs of protecting rural communities from wildfire within three years. This requires brush clearing and thinning in the community protection zone around these communities. The Forest Service is projecting that it will take decades to complete these projects, but many are ready to go, and very labor intensive, with skill sets that are widely available in rural America. The Forest Service infrastructure makes this scalable -- just shift staffing from the environmentally destructive and subsidized timber sales program to the community protection program.

Ready to go investments in mass transit systems, an urban job generator that will also help reduce our dependence on imported oil and cut the costs of commuting for millions of Americans.

This is a sampler -- the environmental community has submitted a very robust set of recommendations to the Obama Transition Team. There are other projects, like renewable grid construction, that are very important as part of a medium term clean energy strategy, but which cannot be gotten up and running in time to provide short term stimulus. These should be incorporated by the Administration and Congress in the President's overall economic recovery package.

Three keys to Green Stimulus:

Let the Market Pick Winners: Green should mean reducing co2 emissions, with the co-benefit of reducing our dependence on foreign oil. The goal, therefore, of green stimulus should be to maximize the benefit to the economy while minimizing costs to consumers. Renewable electricity – along with efficiency, biofuels, nuclear, clean coal, and other technologies – should compete in the marketplace. Renewables is not an objective in and of itself.

Fill-in Private Sector Gaps: There are certain institutional barriers to private sector investment that should make the top of the Government’s list. These are places where the multiplier effect of Government spending will be the greatest. The grid, smart metering, nuclear power, and large-scale demonstration of CCS all come to mind. Re-tooling automotive plants for more efficient vehicles might also make this list in the context of Government’s support for the industry. Early stage R&D in place like storage advanced solar, biofuels, and fuel cells also fits in this category.

Create Global Leverage: We won’t be helping the U.S. compete in the global economy if we don’t coordinate our green initiatives with the rest of the world. Just “investing in renewables” is not sufficient. We need to cap emissions in a manner consistent with the rest of the developed world if we expect to benefit from the global trade in green technologies – and avoid hurting our competitive position in other tradable goods. A plan to cap emissions directly, at least for large source electric and industrial facilities (see www.justcapit.org) is the best long-run green initiative.