Investing in a Clean Energy Present and Future: Opportunities and the Costs of Inaction
CAPAF’s Kit Batten testifies before the Senate Committee on Energy and Natural Resources. Read the full testimony (CAPAF)
Energy policy is economic policy. Reducing our dependence on volatile-priced, dirty sources of energy, and increasing investments in low-carbon energy and efficiency will serve three paramount national priorities: growing our economy, securing our nation’s energy supplies, and combating global warming.
The Center for American Progress, the 501(c)(3) sister organization of the Action Fund, has proposed a comprehensive clean energy and efficiency strategy to capture the “energy opportunity” afforded by the transition to a low-carbon economy.
At the core of this strategy is a greenhouse gas cap-and-trade program that would provide tens of billions of dollars to build a green economy and offset the cost of rising energy prices for low- and middle-income Americans. Also imperative are complementary policies to increase research, development and deployment of low-carbon and efficient technologies in our homes, businesses, and transportation system for use here at home and to export overseas.
Green priorities must be at the center of both America’s energy policy and each step of our economic policy—stabilization, stimulus, recovery, and growth. This investment can be a source of increased business opportunity, innovation, and competitiveness; job creation; stronger, more prosperous communities; and improved energy and national security. Furthermore, this comprehensive strategy can restore the leadership role of the U.S. in the international climate negotiations.
This testimony focuses on the significant opportunities associated with transforming the U.S. economy to a low-carbon model and the significant costs of not investing in this transition.
Job creation and low-carbon infrastructure
Our country is currently in a financial recession. The number of jobs in the United States has declined for 11 months in a row, the unemployment rate has increased to 6.7 percent, and even before this decline, job growth has been meager since 2001.
We must reverse this trend. Investments in clean energy and efficiency as part of the upcoming economic stimulus package will help kick-start the clean energy economy and create millions of jobs. In collaboration with the Political Economy Research Institute at the University of Massachusetts, CAP released a report in September 2008 detailing how a $100 billion investment in clean energy and efficiency technologies and infrastructure would create 2 million jobs over two years, nearly four times as many jobs created by a similar level of investment in oil and gas.
We must prioritize clean infrastructure investments, including efficient green buildings; improved and scaled-up low-carbon energy production, transmission, and distribution; mass transportation and rail systems; and job programs to train Americans to run our clean energy future.
Keeping energy bills low through efficiency investments and increased consumer choice
American families and businesses are facing high and volatile energy prices which make it difficult to plan budgets, especially as pocketbooks are tightening in this recession.
A significant short-term benefit from investing in energy efficiency is keeping energy bills low. Building retrofits, incentives to adopt more efficient appliances, implementation of smart grid technologies, and increasing vehicle fuel efficiency all can help stabilize Americans’ energy bills.
Diversifying our nation’s sources of energy and investing in the development and broad deployment of low-carbon and efficient technologies will afford consumers and business greater choice over their consumption of energy and help keep energy bills lower. For example, a 2008 Merrill Lynch & Co., Inc. study found that increased biofuel production was helping keep gasoline prices about 15 percent lower than they otherwise would have been.
Development of new technologies for domestic and international markets
If we do not put the right policies in place to enable investments in a clean and efficient economy today, the United States will lose the economic opportunities associated with regaining technological leadership in the global innovation marketplace. We must ensure that America is a leader in the clean energy and efficiency market so that Americans have access to the best technologies and benefit from reduced energy costs via homegrown inventions. This, in turn, will also improve our energy security.
Improved energy and national security
The United States is currently dependent on oil to power its economy, but only has about 2 percent of global proved reserves as of January 2008. This dependence on foreign oil leaves us vulnerable to energy supply disruptions like what we’re seeing currently in Eastern Europe, and to price volatility, as we experienced with summer gas prices.
The United States must make better use of the abundant energy resources we have at home, but any action to increase domestic energy production must not ignore global warming consequences. We must invest in alternative fuels with lower lifecycle greenhouse gas emissions than traditional gasoline.
We must also make improvements to our nation’s electricity transmission grid to ensure our energy security. Grid expansion compatible with significantly scaling up renewable energy generation, improved connectivity between different U.S. regions, increased efficiency, improved security to ensure reliable supply, and adoption of smart grid technologies are essential.
Global warming has significant national security costs. In developing countries climatic shifts are expected to trigger or exacerbate food shortages, water scarcity, the spread of disease, and competition over natural resources, all of which will fuel political turmoil, drive already weak states toward collapse, threaten regional stability, and increase security risks.
Here in the United States, costs associated with adaptation, disaster preparedness and response, human health, and natural resource management are projected to be as high as 3.6 percent of GDP by 2100.
The Intergovernmental Panel on Climate Change has found that in order to avoid the worst impacts of global warming, we need to see a peak in global emissions in the next few years. This certainly poses a challenge, but this imperative can and must be met with smart policies that will not only put our nation on a path to a low-carbon economy, but also create sustainable prosperity and growth and increase energy and national security.
It is time for a new vision for the economic revitalization of the nation, the restoration of American leadership in the world, and the movement toward a brighter, more prosperous future.
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