Friday, February 20, 2009
Earlier this week, President Obama signed into law the $787 billion economic stimulus package. Of this sum, more than $80 billion is being directed to start a new, national clean energy infrastructure. Many are acclaiming this clean energy investment as unprecedented. In order to determine whether this praise is justified, Jesse Jenkins and Dr. Gregory Bothun, Physics professor at the University of Oregon, took a close look at some of the individual components of the energy sector stimulus investments and assigned grades to each one.
Because such astronomical amounts of money are often hard to grasp, here is a number that may help put things into perspective: at $2.50 per gallon, Americans spend $1 billion on gasoline…every single day.
With that in mind, here are some of the grades:
A+: To the long-term extension of the Production Tax Credit that spurred the booming wind industry, and makes tax credits for wind, solar and other renewable energy sources fully refundable for the next two years. This extension of the PTC through 2012, and the addition of new credits for other renewables, provides longer-term certainty for businesses to plan their investments. This support should help these new renewable energy sources “to experience robust growth over the next two years, bringing much-needed jobs and new supplies of clean, domestic energy.”
A: To the $5 billion being assigned for energy-efficiency retrofits for low-income housing, significantly adding to the existing Federal Weatherization Assistance Program for efficiency in low-income households. This investment is enough to retrofit 2 million low-income homes over the next two years. However, with 20-30 million households in the United States eligible for weatherization assistance, this is just a first step in the right direction.
C+: To the approximately $16 billion allocated for new mass transit systems, about half of which is going to intercity rail lines, including new high speed rail lines, and half going to urban areas for better public transit systems. Expanding and improving mass transit is critical towards cutting both oil consumption and global pollution. The U.S. is already far behind with regards to high-speed rails compared to nations like China and Japan and the EU. This investment will help provide “comfortable, convenient alternatives to air travel for medium-distance trips.” However, when compared to the scale of our transportation system and the severity of our oil addiction, this is still a minor advancement. Jenkins and Bothun give some perspective: “simply extending the existing DC metro system to Dulles Airport…is projected to cost around $2.5B-$3B... for just 11 new miles of track!”
F: To the mere $300 million being put aside for the Energy Star appliance rebate program. Encouraging people to buy more energy efficient appliances is indeed a smart move. But bearing in mind the approximately 100 million households in the U.S., this amounts to just $3 per household, which is unlikely to give much incentive to energy-conscious consumers.
F: To the $300 million being allocated for the purchase of more alternative-fuel and hybrid vehicles for the federal fleet. This is barely enough to convert just ten percent of the total fleet (less, if more expensive plug-in vehicles are purchased when available). As Jenkins and Bothun point out, “Why not allocate $3B (remember you've got hundreds of billions being doled out here) and completely convert the federal fleet to efficient, advance vehicles?”
Economic Stimulus, Clean Energy and the Scale of Our Challenge: Grading the Stimulus Energy Investments (by Gregory Bothun and Jesse Jenkins, Watthead)
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