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Speaking of “Small People”

Will the Energy Bill Hurt or Help All Americans?

SOURCE: AP/Seth Wenig

Job seekers wait to get an application for a job in New York City earlier this year. The American Power Act includes some strong provisions to lower consumer costs and provide access to new clean energy jobs. But it lacks some fundamental provisions to truly scale up the clean energy economy.

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A BP executive got himself in hot water this week for suggesting that his company is not “greedy” and cares about the “small people.” Pundits were outraged less by his lies than by his condescension.

Admittedly, he should have chosen a different phrase to describe the low-income and vulnerable Americans who are suffering in the gulf region. But he was right to put concern for their plight at the center of the debate.

The question is: Will clean energy champions do the same thing? After all, we know that the dirty energy spill hurt vulnerable Americans. But will the clean energy bill help them?

The time has come to call the question. Momentum is again gathering for comprehensive clean energy and climate legislation. The EPA analysis of the Kerry-Lieberman American Power Act looks promising, lowering consumer costs and creating badly needed jobs. President Barack Obama’s Oval Office speech made the case. July looks to be the month for historic action.

As we move forward, how can we ensure that legislation will bring real and tangible benefits to low-income communities? Any piece of energy legislation should protect the lowest-income consumers from higher energy bills while also creating real jobs and economic opportunities in vulnerable communities. Put another way, such proposals should minimize the pain and maximize the gain.

Our nation deserves an American Power Act that empowers all Americans. And those communities that were left behind and hurt in the old, pollution-based economy should be lifted up and helped in the new, clean, and green economy.

Overall, the present version of the American Power Act is quite promising. It does include some strong provisions to lower consumer costs and provide access to new clean energy jobs. But it lacks some fundamental provisions to truly scale up the clean energy economy, ensure that green jobs are good jobs, and put some green rungs on the ladder out of poverty.

The good stuff

Positive: Jobs, workforce development, and access

Much of what is strong in the bill reflects the dedication of the bill’s sponsors—and the good, hard work of Green For All, the Climate Equity Alliance, the Apollo Alliance, and other dedicated advocates.

The clean energy economy has the potential to unlock numerous employment opportunities for disadvantaged and underrepresented communities. These jobs respect the environment and also offer opportunities for dignified work that lifts people out of poverty and provides access to the middle class.

This opportunity is particularly important to the nation’s 2.1 million unemployed construction workers—where sectors such as residential construction have unemployment rates as high as 38 percent.

One major provision in the bill, the Green Construction Careers Demonstration Project, will bring some relief to unemployed construction workers and provide access to some job seekers who otherwise might be left out of these jobs—including women and people of color. The construction sector and other related industries—such as manufacturers of construction equipment and materials—will experience significant growth as a result of this increased investment by the federal government.

The purpose of the Demonstration Project is “to promote middle class careers and quality employment practices in the green construction sector among targeted workers and to advance efficiency and performance on construction projects.” Projects in the demonstration area are required to have a minimum portion of hours worked by members of targeted groups. This means that low-income workers, women, and people of color will have a fair chance at accessing decent construction jobs that pay well, can support a family, and have helped many Americans gain access to the middle class.

The Green Construction Demonstration Project also establishes that each contractor and subcontractor on construction projects in the program must participate in a qualified labor-management apprenticeship program, with a qualified pre-apprenticeship program, for each craft and trade. Apprentice and pre-apprentice programs are a big deal for workers because they receive on-the-job training while still getting paid.

The program also allows the secretary of labor to create community workforce agreements that establish uniform labor and workplace safety standards, as well as coordinate and reinforce the targeted hiring goals and training programs. These are important because they provide worker protection agreements that ensure that workplaces are safe and workers are treated fairly.

Finally, the bill authorizes Clean Energy Curriculum Development Grants for eligible community partners—such as community colleges—to develop education programs for emerging careers in the clean energy economy. These are the kinds of training programs that all people, including disadvantaged groups, can access in their own communities. It would allow them to receive training in lots of different sectors of the clean energy economy—including green-construction, clean manufacturing, renewable energy, forestry, sustainable agriculture, and climate change mitigation. It also requires the secretaries of labor, energy, and education to develop web-based information and resources for career and technical education and job training in the renewable energy sector.

All these provisions are important because they create pathways to middle-class jobs for all communities, including low-income Americans, women, and communities of color.

Positive: Consumer protection against rising energy costs

The proposed American Power Act includes important measures to minimize the pain and assist low- and moderate-income families in meeting their basic energy needs—including both electricity and home heating oil. These households will receive direct payments in the form of refunds and direct rebates. The refunds are large enough to protect household in the poorest 20 percent of the population from feeling financial hardship as a result of rising energy prices.

It is important to note that energy prices are not expected to rise significantly as a result of climate legislation. In fact, analysis shows that it will actually save families $35 per year through 2020, and more than $71 per year by 2025. In the short run however, even a small rise in the cost of energy can have significant impact for those in the lowest income households—which is why these measures are important.

Here are some additional details about the refund program that the Center on Budget and Policy Priorities has outlined:

  • Households with incomes at or below 150 percent of the poverty line will be eligible to receive monthly energy refunds by direct deposit or through states’ electronic benefit transfer systems—the debit card systems states use to deliver food stamps and other federal benefits.
  • Households that receive food stamps, as well as low-income seniors and people with disabilities who participate in the Supplemental Security Income program, will be automatically enrolled for energy refunds. Other households will have to apply for refunds.
  • Households with slightly higher incomes—between 150 and 250 percent of the poverty line, or about $33,000 to $55,000 for a family of four—will be eligible for a smaller tax credit.

It is important that our commitment to fight climate change and realize a new clean energy economy does not disproportionately affect poor and vulnerable communities, who pay the highest portion of their income toward energy bills.

Positive: Opportunity for rural America

The American Power Act includes opportunities for poor farmers and other rural Americans to access new sources of revenue and jobs, and implement clean energy and energy efficiency on their lands.

The bill will support the Rural Energy for America Program, which helps farmers, ranchers, and rural small businesses with grants that will allow them to install clean energy resources on their lands and cut energy waste by implementing energy efficiency upgrades.

The bill also will establish a multibillion dollar domestic offset program, which will pay farmers and other landowners to plant extra trees to absorb carbon dioxide, install methane capture systems for animal waste, or store carbon in the soil.

Shifting to a clean energy economy on rural lands makes sense for rural America, where large portions of the population live in poverty and unemployment. And the measures outlined above will triple potential revenue streams for farmers and rural communities.

What needs improvement in the American Power Act

It perhaps goes without saying that the Senate proposal could be much stronger or more aggressive in cutting carbon. I will focus my comments on the economic impacts and areas of need.

Needed: "Green Jobs Act" funding for job training

Funding for the Green Jobs Act is one of the bigger provisions left out of the current Senate bill, although it is included in the House version. This is a disappointing miss and a big loss for millions of the nation’s job seekers.

The Green Jobs Act, which President George W. Bush signed into law in 2007, authorized $125 million in green-collar job training opportunities. That’s enough money to train about 30,000 workers a year for jobs in emerging “green” sectors such as the solar and wind industries, green building construction, biofuel production, and more. The American Recovery and Reinvestment Act (ARRA, the so-called “stimulus bill”) allocated $500 million in one-time funding to the Green Jobs Act. Happily, the version of the climate bill that passed the House last summer did incorporate support for the Green Jobs Act. But this important program is not included in the present version of the American Power Act.

Many low-income workers will not be able to fully participate in the job creation spurred by this bill without equitable access to training opportunities.

Needed: Stronger labor standards

Another disappointing provision left out of the Senate bill, also included in the House version, is compliance with Davis-Bacon wage requirements. Davis-Bacon provides assurances that prevailing wages will be paid at minimum to all laborers and mechanics employed by contractors or subcontractors on construction projects funded by the federal government. It is a clear legislative way to ensure that new green jobs are also new good jobs.

Needed: Incentives for "made in America" clean energy

Without real incentives for “made in America” clean energy, there may not be enough green manufacturing jobs to make a dent in our unemployment rate—let alone to create opportunity on a broad scale.

One of the major questions that still remain about America’s clean energy policy is whether it will include a strong national renewable energy and energy efficiency standard. These are national goals to achieve a set amount of our nation’s energy from renewable sources such as the wind and the sun. There can also be goals for the amount of energy we save—for instance, by taking measures like switching out energy-wasting light bulbs, replacing leaky windows and doors, and blowing new insulation. At this point, these national goals are not spelled out clearly—but they should be. We should strive for a national renewable energy standard that requires 25 percent of electricity to be produced from clean energy by 2025 and an energy efficiency standard of 10 percent energy savings through efficiency upgrades by 2020.

National renewable energy and energy efficiency standards will drive demand for new products and services, which will then stand up the industries needed to create jobs. They will create the family-supporting, well-paying jobs that have helped many Americans gain access to the middle class.

Such standards would help spur manufacturing of clean energy technology—and create green-collar jobs—in the United States. Investors and companies would be able to see clear and concrete goals for deploying new technologies in our country—and pour private capital into these new industries. That would create jobs. Without a strong, national renewable energy goal, most green manufacturing will take place in other countries, which will get the bulk of the world’s green jobs as a result.

In addition to a national renewable energy and efficiency standards, a clean energy and climate bill must provide additional incentives for companies to invest in clean energy technologies. Extending manufacturing tax credits and grants for clean energy development will spur the necessary investment in clean energy technologies required to bring them to a large and meaningful scale.

The present version of the bill does not provide enough incentives to spur sufficient investment in the development and deployment of energy efficiency and clean energy on a large enough scale that could meet America’s power needs.

Conclusion

BP’s “small people” comment caused Americans to roll their eyes, in part because we know better than to expect a big oil company to care about vulnerable people. But we do expect Congress to care. And we expect our leaders to translate that concern into strong legislation that actively protects and promotes the interests of the most vulnerable Americans.

Clean energy and climate legislation should blunt the drain on consumers’ wallets and accelerate the gain in creating jobs and building up industries to create a pathway to prosperity. The proposed American Power Act represents a good start, with important programs for the nation’s low-income and underserved communities. Yet the proposed legislation is far from complete. Fortunately, the U.S. Senate has a great opportunity to strengthen the bill by adding these important missing elements.

Van Jones is a Senior Fellow focusing on “green-collar jobs” and how cities are implementing job-creating climate solutions.

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