The President’s economic recovery plan is a good start, with prompt changes needed to provide greater “clean energy” and infrastructure stimulus. Focusing more resources on these two areas would provide a significant boost to manufacturing activity that, as President Obama notes, has hit a 28-year low. What’s happening to our manufacturing economy is unprecedented. The construction and automotive sectors are at a near standstill, consumer products, packaging and exports are in rapid retreat, steel production is down by more than half, and chemistry companies are scaling back production, closing facilities and eliminating thousands of well-paying jobs. And according to a Bloomberg survey in advance of a Commerce Department report this week, economists are expected to report U.S. gross domestic product contracted at a 5.5 percent annual rate in the fourth quarter, the biggest drop since 1982.

The stimulus package appropriately includes energy efficiency and renewable energy provisions that can help drive economic recovery, create jobs, reduce greenhouse gas emissions and improve energy security. Some of these “green jobs” are in new or emerging clean energy sectors, while many are in the manufacturing sectors that hold today’s clean, green jobs. Given the substantial, fast economic rewards that accompany clean energy and infrastructure spending, we believe these two areas must make up a larger proportion of the package. Last month, ACC issued recommendations on making clean energy a centerpiece of the economic recovery and reinvestment plan.

How does clean energy and infrastructure spending boost America’s manufacturing industries? Such investments create considerable demand for high-value materials produced by these sectors. For example, the chemistry industry's products go into items that make the rest of the economy more energy-efficient (e.g. insulation, light-weight vehicle parts) and those used in clean energy technologies (e.g. wind turbines, solar panels, lithium-ion batteries). Given that chemistry is contained in 96% of all goods manufactured in the U.S., economic gains in the chemistry sector have positive “ripple effects” throughout the economy. Conversely, revenue and jobs losses in the chemistry sector cascade to the many U.S. industries we supply. Other manufacturing sectors have a similar story to tell.

We applaud lawmakers and the Obama Administration for making energy efficiency and infrastructure prominent pieces of the stimulus package. In fact, they’re so effective for economic recovery and so valuable to the nation’s long-term energy strategy, we’d go further and concentrate greater spending in these areas. Creating demand for manufactured products tied to green energy and infrastructure can help sustain the livelihoods of the millions of Americans employed in these sectors and the millions more whose industries depend on them.

Then, with strong energy efficiency and renewable energy provisions in place, we’ll be looking to the Congress and the Obama Administration to complete the nation’s comprehensive energy plan with renewed attention to energy diversity (e.g. carbon capture and sequestration, nuclear, combined-heat-and-power, along with renewables) and expanded domestic oil and natural gas production. Today’s relatively lower energy prices are a function of “demand destruction” brought about by the worldwide recession. If we are to strengthen the U.S. economy for the long-term, available and affordable domestic energy supply will be essential.

Updated Jan. 26 at 3:14 p.m.

The Alliance to Save Energy is gratified – and, dare we say, rather amazed – that the House Appropriations and Ways and Means Committees have included in their economic recovery bills roughly $32 billion for energy efficiency – about a 10-fold increase in the annual federal investment in such programs.

Should the committees’ recommendations become law, the funds will be a robust down payment on important priorities for our nation – creating new jobs for our ailing economy, reducing greenhouse gas emissions, and helping consumers and businesses lower their energy costs.

The bills include many Alliance recommendations for economic recovery – energy efficiency retrofits in public buildings and schools; new ‘green’ jobs; low- income weatherization; a ‘smart grid’; and state and local efficiency and conservation block grants.

The stimulus recommendations demonstrate the "power" of energy efficiency to help fuel our economy while benefitting the environment.

Is it enough? No one can know. But this plan does send a clear signal from House Congressional leaders and the incoming Obama administration about a dramatic change in energy priorities. And that’s all for the good. We have never had a better opportunity, nor a more pressing need, to steer our nation in a new energy direction. It’s impossible to know whether this package will be enough to jump-start our economic engine, but as Winston Churchill once said about democracy, for all its faults it is better than the other alternatives. Without it, we could be stranded by the side of the road for another decade.

As one who keeps his eye on the health of our public lands, I know that natural ecosystems also will break down if we don’t attack global warming directly, boldly and persistently. Human health depends on keeping our ecosystems healthy. The new stimulus package includes more than $3 billion for green jobs in our parks, national forests and refuges, much of which can and should be spent on restoring the land itself. This is surely not enough, but it is an overdue change in “business-as-usual,” and an opportunity to build the expertise, knowledge and experience in our public land agencies that will be needed as our wildlands are forced to adapt to a warming planet.

Well, enough for what? This is not enough, clearly to decisively launch the American economy on the green, clean pathway the American people clearly want. But it's a good solid down payment, and a responsible set of choices for a President faced with a dilemma -- get the existing economy humming again while setting the nation on course to build a new one.

What his package -- by its nature and timing -- couldn't and doesn't do is set clear signals for markets about what happens next. That's where energy reform -- not just economic stimulus -- will come in. If builders and manufacturers know that by 2030 new buildings must be carbon neutral, they will invest in the factories, and perfect the designs, needed to accomplish that. If Wall Street understands that power plants built starting next year will fairly soon have to cut their CO2 emissions drastically, no one will invest in conventional coal they will have to shut down. If we decide to get all of our electricity from low carbon sources by 2030, the wind, solar and geothermal supply chains will rise to mee the challenge -- and we'll build the new grid we need.

But that was never the promise of this package or this moment -- we elected Barack Obama President for four years, not four months. And what's remarkable about this package is that the polling is showing that not only does the public want this, but they want much, much more -- and listening to his new team, I think they just might get what they both want and need.

Today the House Democratic leaders and the Obama Team released an economic stimulus blueprint that includes the following allocations for energy programs:

$8.4 billion for energy efficient and renewable energy grants and loans,

$8 billion for renewable energy and transmission loan guarantees,

$6.2 billion for weatherization assistance,

$4.5 billion for modernizing the electric transmission grid,

$2.4 billion for carbon capture and sequestration programs,

$2 billion for advanced battery manufacturing, and

$2 billion for basic science.

Is it enough? Should they be providing money for other key programs?

Tomorrow USCAP will reiterate their support for cap and trade legislation. Is this both stimulating and green? A big yes to both. Two simple reasons. First, decisions about new and existing industrial facilities that emit (or make products that emit) carbon, are on hold. Providing the long-term certainty releases those decisions - creating jobs as technology changes and investments are made. Second, the minute cap and trade passes, emitters are “short” 40 years of abatement. They will work aggressively to hedge this liability by taking strategic decisions to take carbon out of their both their manufacturing processes and their products. Again, net jobs created. Cap and trade allows all clean technologies to compete, and does so without running up Government debt. Green stimulus projects are fine, particularly for the grid, but the big bang for the buck is in cap and trade.

The economic stimulus package being worked on by Congress and President-elect Barack Obama presents an opportunity to quickly get workers back on the job while taking a major step forward on renewable energy technology and infrastructure projects needed for a clean energy economy.

My Select Committee on Energy Independence and Global Warming will hold a hearing on this important subject Thursday January 15th at 2 PM. It will feature green jobs champion Van Jones, who was recently featured in the New Yorker magazine. If you have never had the opportunity to hear Van talk about putting people to work in clean energy jobs that benefit the economy, their communities and the planet, then this hearing is not to be missed.

Philadelphia Mayor Michael Nutter will also be testifying. He will discuss how smart infrastructure projects such as smart storm water recovery policy that integrates park systems, vacant lots and road design will improve public health in our cities and towns.

The stimulus package represents the first opportunity for Congress to address pressing economic issues through clean energy and efficiency solutions that create jobs and save consumers money. But Congress is just beginning to roll up our sleeves, and future legislation on renewable energy, building efficiency and global warming will be addressed as quickly as possible. Our economy and the planet depend on it.

Wind energy projects offer a great opportunity to simulate the economy and build a greener future at the same time. Using wind energy for electric power reduces the amount of greenhouse gases that contribute to global warming. Wind power generation also uses no water, in contrast to heavy water consumption for other power generation methods. Most significantly, increased use of wind power will create new manufacturing jobs at a time when we really need them.

Since the beginning of 2007, more than 65 wind component manufacturing plants have been opened, expanded or announced. More than 14,000 jobs have been created. Right now, more than 8,000 new jobs are in the pipeline.

The challenge is to keep wind energy growing and producing new jobs in this tough economic climate. Until recently, the production tax credit was a significant incentive for investment in wind and other renewable energy sources. But the turmoil in the credit markets and the downturn in the economy have made the tax credit much less attractive. So we are asking Congress and President-elect Obama to support a temporary adjustment that would make the tax credits refundable. We believe this would provide a significant investment incentive.

Longer range, we are asking that the production tax credit be extended for five years—it would expire at the end of 2009. We also asking for a national renewable electricity standard (RES)—already adopted by more than half the states—and new measures to help create an new green energy transmission superhighway. Both the RES and a modern transmission network would stimulate the new energy economy and lead to reduced greenhouse gases.

Our energy and environmental policies need updating, and our economy needs a shot in the arm. Fortunately, with the right policies, we can work on both objectives at once.

Here's an interesting post from Robert (Bob) Bendick, director of government relations for The Nature Conservancy:

Economic stimulus bills have not yet emerged either from the President-Elect’s office or from Congress, but there is, of course, a lot of discussion about what might or should be in them. The Nature Conservancy isn’t trying to influence the overall debate, but we believe that a portion of this very large spending proposal should be used to invest in the restoration of damaged natural systems and to reduce the damage to natural features from conventional infrastructure development. We also believe that the existing environmental review process should be retained for all stimulus-funded projects.

Why did I use the term “invest in restoration” rather than saying spend money on restoration? The nation’s rivers, coasts, estuaries, forests and grasslands, including millions of acres of public lands, can be termed “green infrastructure” that is directly and indirectly linked to billions of dollars in economic productivity and a wide range of ecosystem services. Wetlands improve water quality and buffer urban and rural lands from floods. Forests filter water and absorb carbon from the atmosphere. Oyster reefs can provide self-renewing barriers to reduce erosion along shorelines and provide protection from coastal storms. Healthy rivers, forests, and estuaries provide habitat to sustain resource-based economies, such as tourism, forestry, fishing, and aquaculture.

But broken ecosystems only provide a fraction of these benefits, so fixing this green infrastructure is a legitimate target for stimulus spending and, as we have learned from trying to repair Florida’s Everglades, fixing ecosystems is expensive and requires many of the same kinds of labor as building conventional infrastructure. So it is our view that we should put some of the laborers, equipment operators, engineers, hydrologists, and landscapers, who are no longer at work developing natural areas, back to work restoring rivers, wetlands, forests and shorelines. Thousands of such projects, from repairing eroded local creeks to rebuilding the damaged marshlands south of New Orleans, are already designed and ready to go.

Similarly, while we fully understand that worn roads, pipelines, dams and levees should be repaired through a stimulus package, it is entirely feasible to include in this repair the cost of mitigating as much of the environmental damage caused by the often poorly designed original construction. This means things like elevating sections of highway or installing culverts to allow natural water flows and re-designing flood protection to make use of natural floodplains and wetlands. New infrastructure should employ the state of the art in environmental design. While such things will add construction cost, they will put more people back to work and will protect the very real economic and ecological values of a healthy environment.

Finally, there has been talk of setting aside the National Environmental Policy Act (NEPA) and other environmental reviews to speed up infrastructure spending and job creation. This makes little sense to us. Thousands of infrastructure projects around the country have already gone through the environmental review process. We should send money to them first, while other projects are evaluated. We got into the economic, energy and ecological fixes we’re in today by doing things that were unsustainable. A part of repairing our economy is recognizing and respecting the long term economic value of nature. NEPA is designed, in part, to do that. Bypassing environmental reviews to build stuff is the old way. It’s time for real change.

We are confident that one of the best ways to “re-power” our economy is with dynamic investments in energy efficiency initiatives. By taking the energy efficiency approach to the important and immediately necessary work of revitalizing the flailing economy, we can ensure that such investments yield dividends – through avoided energy costs and CO2 mitigation – far into the future. Indeed, energy efficiency is one of the most effective strategies for creating new jobs that not only help the economy recover but also pave the road to a new energy future. And such a sustainable energy future for the U.S. is by no means a “given.”

Today, the United States is both the world’s largest energy consumer AND the most energy inefficient economy among developed countries. This also adds up to our being, on a per capita basis, the most CO2-intensive country on the planet. Such “first place standings” are no badge of honor.

But a serious, aggressive, carefully targeted energy efficiency agenda can move us from last to first among nations in energy efficiency.

According to McKinsey and Company, investments in currently available energy efficiency technologies – better lighting, HVAC equipment, insulation and the like – will allow the United States to flatten energy demand and GHG emissions at today’s levels by the end of the next decade. Energy efficiency spending that the Alliance to Save Energy and like-minded groups recently proposed would help us fulfill that promise.

On December 19, 2008, we joined the Edison Electric Institute (EEI), Natural Resources Defense Council (NRDC) and Energy Future Coalition at a news conference in Washington, D.C., where we made the case for energy efficiency as the quickest, cheapest, cleanest way to jump start our economy and put in place some of the infrastructure necessary to building a new, clean, efficient energy future for America.

We recommended that the federal government invest in making our schools, municipal buildings, government buildings, commercial buildings, and homes more energy efficient; leverage available funds to induce state and local governments to adopt and enforce stringent building codes; and ensure that utilities are rewarded, not penalized, for investing in energy efficiency.

These proposals would create tens of thousands of jobs across America, particularly in the construction industry, the segment of the economy most hard-hit by the down-turn in the real estate market, while also providing immediate financial relief to Americans by lowering their home energy costs.

Additional information (including C-Span coverage of the joint press conference where the energy efficiency stimulus proposals were unveiled can be found at www.ase.org/content/article/detail/5283; a summary of our proposal is at ase.org/content/article/detail/5282.

President elect Obama's goals of increased energy efficiency and cleaner, less emitting energy supplies can play a role in the stimulus package. The latest U.S. Department of Energy projections show that over the next two decades U.S. demand for energy will increase by 13 percent and that fossil fuels will be 80 percent of our energy supplies in 2030. U.S. Given that reality, Congress and the incoming Administation should also consider providing better tax treatment for a variety of energy sources. An ACCF international comparison prepared by Ernst&Young of effective tax rates on a variety on energy investments showed that the U.S. ranks near the bottom in terms of cost recovery allowances and also has the highest corporate tax rate(see http://www.accf.org/media/dynamic/8/media_82.pdf for full report. Providing investors with a competitive tax code could have a major impact in increasing U.S. energy supplies and put people back to work as well. Such an approach is preferable to having the federal govenrment pour ever more taxpayer dollars into renewable energy (renewables already receive the lion's share of Federal budget energy expenditures). Renewable energy tends to be more expensive than conventional energy and substituting more expensive energy for cheaper energy will slow, not enhance, the economic recovery.

Updated at 11:51 a.m. on Jan. 12, 2009.

With the economy continuing to deteriorate, there’s little doubt that a huge dollop of additional fiscal stimulus is needed. And given the need to de-carbonize both the automobile sector (98 percent reliant on fossil fuels) and the electricity-generation sector (70 percent), there’s little doubt we also need a mix of government investment and tax credits to stimulate “greener” energy. Might the latter serve the former? In other words, could this be an example of the much overhyped “win-win”?

Probably not, I’m afraid. That doesn’t mean that we shouldn’t be thinking hard about both, but the smartest ways to stimulate a greener energy mix are unlikely to put many people to work quickly. For instance, even more ambitious renewable portfolio standards than those established by the states will surely stimulate utilities’ demand for more wind- and solar-derived electricity. But this will take time to be met because factories are running at nearly full capacity now and, much more importantly, few facilities making wind turbines and solar cells or collectors are located here in the U.S. Moreover, with the domestic car companies’ very survival hanging in the balance, they are unlikely to accelerate the re-tooling of their manufacturing lines to make more fuel efficient cars any faster than they already are.

The one exception might be the expansion of the electricity grid. Everyone knows that we need to improve the connectivity of the grid so that power shortages in one region of the country can be met by wheeling power from other regions with excess generating capacity—not to mention get any wind- and solar-power from the places where they are generated to those where they’re needed. This is akin to a public works project that could conceivably put people to work quickly. But there’s a snag here, too. States currently have the power to license new transmission lines within their borders. Unless the federal government makes use of its pre-emptive powers, states could hold up even this potential “twofer” if vocal residents decide to fight the installation of such lines near their homes.

Let’s just look ahead two or three years. With luck, by that time the economy will be back in gear and we’ll be thinking about ways to reduce the massive deficits we will have seen between 2008 and 2010. By instituting a gradually increasing tax on the carbon content of fossil fuels, we would both help with the “cool-down” the economy will need and at the same time create the single best incentive that could exist for a greener transportation and electricity generation sector. Now there’s a real win-win.

A few days ago President – elect Obama set forth his economic stimulus plan, "The American Recovery and Reinvestment Plan" containing several energy proposals, including:

• Doubling the production of alternative energy in the next three years;
• Modernizing more than 75% of federal buildings which I assume means making more energy efficient; and
• Making more than two million homes more energy efficient.

While it is difficult to determine what vague speech language actually means until there is a concrete proposal, it is easy to understand the concepts and recognize that it is a practical, common sense proposal that should be implemented. But the proposal is far from bold!

Certainly we should double the production of alternative energy but that will not generate much additional energy for the nation. Instead of focusing on just numerical goals, we should dramatically increase the production of all new sources of clean energy, i.e. energy that does not produce greenhouse gases. These are completely different concepts. Usually alternative energy is considered to be a few limited sources, e.g. solar, wind, and biomass. We need to include nuclear and hydroelectric so that the nation can develop base load capacity not just additional intermittent capacity. If we as a nation are to be serious about creating significant economic activity from clean energy then we should not limit our options because by doing so we not only limit the amount of clean energy we can produce but we also limit the amount of economic activity that we can generate from private sector funds.

As to making federal buildings more energy efficient, this one is just a home run. Moreover, a law establishing this program has already been enacted, so this aspect of the economic stimulus can start immediately. Under the existing Energy Savings Performance Contracting (ESPC) Program, established by the Energy Independence and Security Act (EISA), over $80 billion dollars of energy efficiency projects at federal facilities can be immediately undertaken by the private sector without one penny of up-front federal funds or the need for federal appropriations. Under the ESPC program private sector contractors retrofit for energy efficiency purposes, federal buildings. These private sector contractors are paid by the federal government from the energy savings achieved by these buildings over the life of the improvement. Therefore, no federal authorizations or appropriations are needed and the private sector takes the risk.

Since the federal government is the single largest consumer of energy in the United States, this program is absolutely necessary if it is to achieve the federal goal of reducing its energy use by 30% from 2005 levels by 2015. On December 18, 2008, the Bush administration released the list of qualified federal contractors; now all that needs to be done to move forward with massive energy efficiency efforts is to bid out the contracts. The ESPC program can start today: it is authorized by Congress; the list of qualified contractors has been made; and federal appropriations are not needed. Implementation of this program should not have to wait until the stimulus bill passes Congress in February.

Moving to the "super bold" category, the most important change needed to move forward with the prompt implementation of clean energy activities is to set forth a process that will move these technologies quickly into the marketplace. Such a fast-track process is essential since the biggest hurdle to the development of energy infrastructure is the delay caused by massive federal regulatory roadblocks and lawsuits which delay and many times stop the development of energy projects. These delays can be avoided by:

1. Streamlining the permitting and appeals process for clean energy projects. The most significant threat to developing and deploying clean energy technologies is Not In My Back Yard (NIMBY), which unfortunately does not discriminate between projects or technologies. Therefore, if there is to be a commitment to clean energy, there must be a commitment to moving these projects to the marketplace. We do not suggest abrogating programs such as NEPA; rather, the permitting and appeals process must be streamlined, sped up and have a set time limit for a final decision.
2. Reaffirming the recent final regulation of the Department of Interior on Sections 4 and 7 of the Endangered Species Act (ESA), which govern the use of interagency consultations on federal projects. Under these revised final rules, federal agencies must consult with the U.S. Fish and Wildlife Service only when the effects of federal projects on listed species are likely to occur, while making consultations voluntary on federal projects that are unlikely to impact listed species. This change in the ESA evaluation process is significant because, without such safeguards, all federal projects that generate greenhouse gases, e.g. highways, airport runways, could have to undertake the Section 7 consultation process and this process alone will cause long time delays in building out the nation’s infrastructure. The new administration and its staff will be the persons tasked with making this determination of what projects are likely or unlikely to have a direct impact on a listed species; therefore, they need to maintain this discretion in order to implement the President-elect’s economic stimulus plan. If ESA Section 7 consultations are mandatory for all projects that emit greenhouse gases, then literally every federal project will be subject to delay.
3. Immediately implement the National Interest Transmission Corridor Provisions of the Energy Policy Act of 2005. These transmission corridor projects are different from the smart grid. The smart grid is a software approach to make the grid more efficient. The new transmission corridors are additions to the grid, especially for those new transmission projects that will transmit the energy generated in rural areas to urban areas in need of the energy. The nation needs both new transmission capacity and a more efficient grid.

The President-elect’s economic stimulus is moving in the right direction but it needs to be more bold and include within it regulatory certainty for all types of clean energy. And if this occurs, the private sector will greatly participate by generating significantly more economic activity and jobs. It will take so little to make the clean energy proposals bold, so let’s go for it. We will all benefit from the new clean energy projects.