Idea of the Day: Investing in a Green Recovery

October 23, 2009

PRINT:
• 
SHARE:
• 
• 
• 
• 

The Center for American Progress, alongside the Political Economy Research Institute at the University of Massachusetts, has undertaken detailed analysis of the impacts that strong climate and clean-energy legislation could have on the U.S. economy. It looked at a suite of policies designed to curb CO2 emissions by driving investment into clean energy technology, and assessed their impact on employment opportunities, economic growth and people’s incomes. This modeling focused on the combined impacts of two federal government initiatives. 1) The set of clean-energy provisions incorporated within the American Recovery and Reinvestment Act, initiated by the Obama administration and passed into law by Congress in February, and 2) The recently passed American Clean Energy and Security Act, co-sponsored by Rep. Henry Waxman (D-CA) and Rep. Edward Markey (D-MA).

This analysis shows that these two measures operating together can generate roughly $150 billion per year in new clean-energy investments in the United States over the next decade. This estimated $150 billion in new spending annually includes government funding but is notably dominated by private-sector investments. An estimate of this sustained expansion in clean-energy investments triggered by the economic stimulus program and the potential implementation of Federal climate and clean-energy legislation, can generate a net increase of about 1.7 million jobs nationally. This expansion in job opportunities can continue as long as the economy maintains a commitment to clean-energy investments in the $150 billion per year range. If clean-energy investments expand still faster, overall job creation will increase correspondingly.

These job gains would be enough—on their own—to reduce the unemployment rate in today’s economy by about one full percentage point, to 8.4 percent from current 9.4-percent levels—even after taking into full account the potential for any job losses or transitions elsewhere in the U.S. economy. Our analysis calculates that roughly 2.5 million new jobs would be created overall by spending $150 billion on clean-energy investments. Similar investments in conventional fossil fuel energy would produce only 800,000 jobs, so that even if all the investment in clean energy and efficiency were to come directly from traditional energy sectors, an unlikely event, the total impact on the U.S. economy would be a net gain of 1.7 million sustained jobs.

For more on this topic, please see:

• Creating Clean Energy Jobs to Drive Economic Recovery, by Bracken Hendricks