Energy Investments Power Recovery Packages

The Senate version of the American Investment and Recovery Plan ups the ante on clean energy investments, write Dan Weiss and Alexandra Kougentakis.

Senate Minority Leader Mitch McConnell (R-KY) walks through the Capitol on the way to a news conference as work on the economic stimulus bill continues. (AP/J. Scott Applewhite)
Senate Minority Leader Mitch McConnell (R-KY) walks through the Capitol on the way to a news conference as work on the economic stimulus bill continues. (AP/J. Scott Applewhite)

This article contains a correction.

On January 28, the House of Representatives passed the American Recovery and Reinvestment Act, H.R. 1, by a vote of 244 to 188. The $819 billion recovery bill includes $72 billion for clean energy programs, and another $20 billion for clean energy tax incentives. This huge investment in weatherization, efficiency, transmission, transit, and clean vehicles programs will create at least 459,000 jobs by the end of 2010, as well as reduce oil consumption and global warming pollution.

Not to be outdone, the Senate Appropriations Committee passed the American Investment and Recovery Plan, S. 336, which includes $78 billion* in clean energy spending as part of its $365 billion recovery package. At the same time the Senate Finance Committee passed a $522 billion tax package that includes $31 billion in tax incentives for renewables and energy efficiency. The bills will likely be joined before Senate floor consideration.

Unfortunately, S. 336 also includes a $50 billion expansion in loan guarantees, with the bulk of the loans going for nuclear plants and coal-to-liquid transportation fuel plants, although it is possible that they may also go to renewable energy projects. The nuclear and liquid coal projects sparked by the loan guarantees would take years to come to fruition and to create many jobs. Liquid coal plants also produce huge amounts of greenhouse gases—twice as much as the production of ordinary gasoline. They consume huge amounts of water—up to seven gallons for every gallon of fuel produced. This expanded loan guarantee program is the type of unnecessary pork barrel spending that President Obama urged Congress to avoid, and it should be removed from the final bill.

The other clean energy provisions in the Senate and House recovery bills are fairly similar. The House bill includes several programs not in the Senate bill, including funding for the Energy Star Program and energy efficiency investments in self-help and assisted homeownership programs. The Senate package provides more funds for investments in rail transportation and energy efficiency investments for Department of Defense facilities.

energy investments in stimulus bills

For a detailed description of energy-related spending in the House and Senate recovery packages, download this chart (.xls).

Like the House bill, the Senate bill would invest dramatically more resources in clean energy programs compared to existing 2009 spending levels. The Senate measure would increase investments in the following areas.

  • Building and appliance efficiency would receive nearly 400-percent of 2009-level funding. This includes measures to lift the energy efficiency of public housing and low-income households.
  • Funding for renewable and alternative energy research spending would be 500 percent compared to 2009 levels.
  • Funding for “carbon capture-and-storage” research to capture greenhouse gas emissions from coal-fired power plants would receive 1,479 percent compared to 2009. The Senate bill allocates $2.2 billion more for CCS than the House program, which may be difficult to quickly spend.
  • Clean vehicle and fuels programs to speed the development of super fuel-efficient cars and cleaner fuels would receive 10 times 2009-level funding, including $2 billion for badly needed advanced battery research.
  • Spending on sustainable transmission efforts would be 150 times 2009 levels to adopt “smart grid” technology and rehabilitate and expand the transmission grid.

Construction investments in the Department of Defense alone, much of which would go toward upgrades for energy efficiency and renewable energy installations, would create 85,870 jobs. Employment in energy research, demonstration, and deployment will directly result from the investments made in existing programs as funded in this bill.

Conservatives in the House of Representatives offered an alternative plan that put tax relief at the center of our economic recovery and did not invest in renewables or efficiency. This approach missed opportunities to create jobs, upgrade our electricity infrastructure, and address long-term challenges such as global warming and our dependence on oil. Both the House and Senate versions of the Economic Recovery and Reinvestment Act should foster short-term job creation and long-term economic growth, national security, and an inhabitable planet.

*This figure is based on the total program spending as indicated in the legislation of the Senate bill. Actual investments in renewable energy and energy efficiency may be somewhat lower due to spending on non-clean energy efforts within some of the programs, such as in the tribal housing block grants.

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Daniel J. Weiss

Senior Fellow