On Thursday, the Center for American Progress released a new report that outlines plan for jobs, business, and a growing economy called “300 Million Engines of Growth.”
It notes that climate change’s “costs to businesses, families, and government are often hidden but are becoming less so.” The report goes on to detail ways in which climate solutions “offer massive new economic opportunities.” Just as important, any infrastructure investments should reflect the impact of the consequences of climate change like extreme weather and climate change.
Transitioning from an energy system reliant on energy that gets more expensive as we use it up, to one that gets cheaper the more we use it is a winner for the economy:
The United States is dependent on imported foreign oil, is subject to volatile energy prices, and is starting to face the high costs of climate change. Each of these pressures creates a drag on economic growth. In 2012 roughly 6 percent of our electricity came from renewables, and the United States imported $313 billion in oil. Our country must capture the multitrillion-dollar opportunity of clean energy by stimulating demand, ensuring effective financing, building efficient transmission infrastructure, and prioritizing efficiency. Our goal is for the United States to have clean, sustainable, and economical energy sources — quadrupling renewable use between 2008 and 2020 and slashing oil imports in half — in order to fuel economic growth.
The authors say that “clean energy represents such massive and fundamental opportunities for the American economy … that we have devoted a separate section of this report to capturing this opportunity through smart and effective interventions.” Here are the main climate and clean energy recommendations from “300 Million Engines of Growth”:
- Instituting a $25/ton carbon tax on all large polluters, starting with power plants. We believe that the policy most likely to drive significant economic growth in the short term while also tackling the climate change problem is a tax on carbon emissions, starting in the electric-utility sector and slowly expanding to other parts of the economy. Setting a carbon tax will directly relate to our plans for economic growth by encouraging private-sector investment in new power plants and reducing industrial carbon pollution to avoid the most catastrophic effects of climate change that would devastate our economy.
- Launching a comprehensive clean energy investment program that includes direct support of $9 billion per year for research and development in both the public and private sector, the extension of the wind energy production tax credit, the launch of a green bank that would provide a range of financing tools to enable clean energy deployment, and public market-financing tools. The amount of renewable energy used for electricity in the United States doubled from 2008 to 2012. We can do this again by 2020. This would move us to 12 percent of power from renewables by 2020, quadrupling since 2008, and putting us on course to 35 percent by 2035, a goal the Center for American Progress called for in “Helping America Win the Clean Energy Race.”
- Improving energy efficiency: Energy consumption comprises a large share of family budgets and continues to contribute to America’s trade deficits. Efforts to improve energy efficiency will not only create jobs today but also will ease the strain on family’s disposable incomes. Three energy-efficiency initiatives — Home Star ($6 billion rebate plan for homeowners to upgrade with energy efficiency), Building Star ($6 billion in incentives for businesses to retrofit commercial and multifamily residential buildings), and Rural Star ($4.9 billion loan authority for rural electric cooperatives), which provide incentives for property owners and small businesses to invest in energy-saving technologies — should be part of any short-term jobs plan. These programs would generate 250,000 new private-sector jobs broadly throughout the economy, while also leveraging between $3 and $4 in private investment for each $1 in incentives—all while saving people an estimated $4 billion per year in energy costs for years to come.
- Eliminating $4 billion in annual tax breaks for oil and gas companies and creating a future oil reduction technology fund to invest in research, development, and demonstration for clean vehicles. the fund would be fully supported by one cent of every dollar of profits from the big five oil companies.
- Increasing government investment in research by doubling budgets for the Department of Energy’s Office of Science, the National Institute of Standards and Technology, and the National Science Foundation, and encouraging increased private investment by improving the research tax credit
- Pursuing supply-chain sustainability: Government involvement can be critical where losing or failing to develop a particular segment of industry would have severe implications for the wider economy in terms of jobs and output. Solar photovoltaic, or PV, cells are one example of an industry that has suffered as a result of a vanishing supply chain. Although the first PV devices were invented here, the United States now produces only 6 percent of the world’s PV cells. A major reason the country has failed to grab more of this fast-growing market is that many of the shared technologies (for example, semiconductors, flat-panel displays, light-emitting diodes, and solid-state lighting) have already relocated to Asia. Had the United States not long ago ceded production of key component technologies for PV cells, we would be better positioned today to compete in the solar-energy industry.