Our guest blogger is Tina Ramos, Special Assistant for Energy Policy at the Center for American Progress.
This week marks the one year anniversary of the signing of American Reinvestment and Recovery Act of 2009 (ARRA) and the release of The Vice President’s Annual Report to the President on Progress Implementing the American Recovery and Reinvestment Act of 2009. This morning President Obama noted that ARRA investments have already created 200,000 jobs in the clean energy and construction sectors. Obama discussed job creation from ARRA in further detail:
The jobs of the 21st century are in areas like clean energy and technology, advanced manufacturing, new infrastructure. These projects will put hundreds of thousands of Americans to work. And in many cases, they already have”¦These are well-paying, long-lasting, private sector jobs that wouldn’t be possible without the Recovery Act. They’ll be doing the work that America needs done to stay competitive in a global economy. In no area is this more important than in energy.
Just take one example: Consider the investment that we’ve made in the kind of batteries used in hybrid and electric cars. You’ve heard about these, right? Before the Recovery Act was signed, 98 percent of the world’s advanced battery production was done in Asian countries. The United States did less than 2 percent of this advanced battery manufacturing that’s going to be the key to these high-mileage, low-emission cars.
Then we invested in new research and battery technologies, and supported the construction of 20 battery factories that will employ tens of thousands of Americans — batteries that can make enough — factories that can make enough batteries each year to power half a million plug-in hybrid vehicles. So as a result, next year — next year, two years after the Recovery Act — the United States will have the capacity to produce nearly 20 percent of the world’s advanced batteries — from less than 2 percent to 20 percent. And we’ll be able to make 40 percent of these advanced batteries by 2015 — an entire new industry because of the Recovery Act”¦
So that’s our future. That’s what’s possible in America.
This transformation to a clean energy economy that President Obama discussed this morning will not only create jobs and promote necessary innovation, but will reduce America’s dependence on foreign oil, improve national security, put our economy on a path toward sustainable, long-term recovery, and could reduce other pollutants in addition to greenhouse gases. Through ARRA, the Obama Administration has already taken major steps to jumpstart the clean energy economy transition.
On February 11th the White House Council of Economic Advisers (CEA) released its Annual Economic Report of the President to Congress, which included strong recommendations for transforming the energy sector and reducing global warming pollution. CEA outlined reasons why putting a price on carbon through a market-based “cap-and-trade” system combined with government incentives to promote research, development and deployment of new clean energy technologies is necessary for America to transition to a more robust clean energy economy.
According to CEA’s Economic Report of the President, ARRA provides $60 billion in direct spending and $30 billion in tax credits to clean energy technology and infrastructure, renewable energy generation and transmission, energy efficiency, and transit improvements. The Energy Information Administration projects that energy from renewable sources will grow from 3 percent in 2008 to 7 percent in 2010 largely because of the renewal of federal tax credits and the funding of new loan guarantees for renewable energy through ARRA. CEA estimates that the approximately $90 billion of ARRA clean energy investments will save or create about 720,000 job-years by the end of 2012 and approximately two-thirds of the job-years represent work on clean energy projects.
It is clear that ARRA clean energy investments and tax credits have had a positive impact on job creation and technology innovation over the past year. This indicates that additional, effective policy is necessary to put a price on carbon and spur the research, development, and deployment of clean energy technology.
It is crucial for the Senate to pass comprehensive climate legislation with similar provisions as included in the American Clean Energy and Security Act (ACES) passed by the U.S. House of Representatives in June 2009 this year “because the nation that leads the clean energy economy will be the nation that leads the global economy.” ACES includes a cap-and-trade program consistent with President Obama’s goal of reducing greenhouse gas emissions by 17 percent by 2020, and by more than 80 percent by 2050. CEA’s Economic Report of the President has calculated that ACES will result in approximately $1.6 trillion to $2.0 trillion of avoidable global damages in present value terms between 2012 and 2050.
CEA’s Economic Report of the President warns that unchecked global warming pollution would devastate the United States and “continued reliance on [carbon-intensive] fuels will have a range of negative impacts, including increased mortality rates, reduced agricultural productivity in many locations, higher sea levels, and the need for costly adaptation efforts.” Without action to mitigate climate change, economic effects in addition to environmental effects are “likely to be significant and largely negative.” Continued reliance on fossil fuels makes the economy susceptible to spikes in crude oil prices. Along with the Intergovernmental Panel on Climate Change’s most likely temperature increase of 3 degrees Celsius comes a projected decline is 1.5 percent of global GDP.
For these reasons, a clean energy transformation is essential.