Throughout testimony presented by several witnesses before the Senate Environment and Public Works Committee (EPW) last week, one theme consistently resurfaced – cap and trade will spur investments in clean technology and increase jobs in certain sectors by putting a price on carbon. It is a simple formula: a price on carbon will create certainty, certainty will lead to increased investments in clean energy technology, and increased investments will lead to a larger share of the clean technology market.
As Kate Gordon, Senior Policy Advisor of the Apollo Alliance, testified, the United States is already losing ground on the international front. Clean energy investments are the key to our new economy and have been growing even in the face of inconsistent federal incentives, but without true federal commitment, clean energy technologies will not reach their full potential. According to the UN Environment Program, investments in renewable energy technologies in 2008 increased by 2 percent in Europe to $49.7 billion, decreased in North America by 8 percent to $30.1 billion, and grew by 27 percent in developing countries to $36.6 billion. Specifically, investments in China grew by 18 percent to $15.6 billion and in India by 12 percent to $4.1 billion.
Members of the business community also stressed how important federal regulation is in creating price certainty for carbon, which would increase clean technology investments domestically and therefore clean energy jobs. J. Stephan Dolezalek, Managing Director of VantagePoint Venture Partners, testified “a growing number of the Fortune 500 community has signaled that establishing a price certainty with respect to carbon is far better for business than a continued uncertainty in the face of certainty elsewhere in the globe.” As the percentage of global capital invested in clean energy industries continues to increase, the United States will need price certainty to attract investment and thereby create jobs.
How does this clean economy market affect the domestic job market? The truth of the matter is that given the size of the U.S. economy, new jobs are constantly created while existing jobs are lost. Even though sentiments from both sides were reflected in the testimonies, this process will continue regardless of the specific legislation that will be passed. This is little consolation for those losing their jobs, but legislation can be written to include transitional assistance and training to adversely affected workers, as is done in both the Waxman-Markey bill passed by the House in June and the recently introduced Kerry-Boxer bill in the Senate. In the case of clean energy jobs, if the U.S. creates a favorable investment environment at home, American jobs using existing as well as new skills will be created, no matter where a given company is headquartered. The value chains for many clean energy technologies and products are extensive, and even a Chinese wind manufacturer will have to hire American workers if it wants to market turbines in the United States. Philadelphia’s mayor, the Honorable Michael Nutter, summed it up well: “These new, green collar jobs require building science, carpentry, electrical, plumbing, sales, and communications skills. These jobs include: insulators, carpenters, heating technicians, energy auditors, and educators, as well as support services, sales, and manufacturing. The good news is that these jobs are a perfect fit for Philadelphia’s workforce, and are not transferable overseas.”
The potential for job growth is welcome news as the U.S. economy continues to climb out of the recession. In opening statements of the final day of hearings, the Senators happily noted the Commerce Department’s announcement of the first increase in real GDP since the third quarter of 2007. Testimony on behalf of businesses and workers at the EPW hearings last week took this welcome news a step further by explaining how comprehensive climate legislation could further expand the economy and increase jobs.
At the Environment and Public Works hearing on Tuesday, both Secretary LaHood of the Department of Transportation (DOT) and Administrator Jackson of the Environmental Protection Agency (EPA) explained that emissions reductions progress is already underway in the transportation sector. Sec. LaHood stated, “We have much to do, but we are not waiting to begin taking aggressive and meaningful action.”
While the Congress has been working towards establishing comprehensive climate legislation, the DOT, EPA, and Department of Housing and Urban Development (HUD) have been collaborating to develop Federal policies that could help create sustainable communities. The aim is to support and shape state and local land use decisions and infrastructure investments to develop livable communities where people have the option to drive less. According to the DOT, on an average day American adults travel 25 million miles in trips of a half-mile or less and almost 60 percent use motor vehicles for this travel. Walking, biking, and riding transit, regardless of the area where an American might live, are excellent alternatives. “If the presence of these alternatives promotes less driving, then that will reduce road congestion, reduce pollutants and greenhouse gases, and use land more efficiently."
“Kick the grocery bag habit, turn the thermostat down, change just one in four bulbs to CFLs, and drive smarter,” that’s my advice in a nutshell as I travel around the country talking to people about saving money and saving energy through the Make an Impact program. Now, a great new study by David Biello in this month’s Scientific American backs this message up: “33 simple actions—ranging from improving the insulation to carpooling—could cut those annual carbon emissions by 123 million metric tons. That savings would more than entirely offset emissions from petroleum refineries, iron and steel works, and aluminum smelters combined.” Those aren’t small numbers and could represent as much as 7 percent of our emissions. There really is a role for the little guy in tackling the challenges of climate change.
For the last year we’ve been holding workshops and talking with communities about simple steps we can each take to save money, save energy, and save the planet along the way as part of The Make an Impact program (www.alcoa.com/makeanimpact or www.entergy.com/makeanimpact). Make an Impact is an education and action partnership between the Center and two thought-leader companies, Alcoa and Entergy. The program’s cornerstone is a website that anyone can visit, filled with non-biased, science based tools and information about reducing personal energy consumption. Those who try its carbon calculator will even get customized tips for improving their energy use choices. Originally designed to help employees, the website, tools and workshops have grown to include communities where partners have operations and their customers.
On Friday EPA released its first cut assessment of the economic impacts of the Clean Energy Jobs and American Power Act of 2009 (S. 1733), the Senate‘s response to the House climate and energy bill passed in June. Senator Boxer (D-CA), Chairman of the Environment and Public Works Committee, unveiled the analysis along with new details of the bill she is co-sponsoring with Senator Kerry (D-MA).
The bottom line: EPA anticipates that the Senate and House bills will yield very similar results in terms of overall costs, allowance prices, and emissions. Some differences in key provisions could raise the price tag of the Senate bill by up to 1% over its House counterpart. As for greenhouse gas (GHG) emissions, the tighter 2020 target in the Senate bill -- requiring a 20% reduction in emissions compared to 2005 levels, as opposed to 17% in the House bill -- would reduce cumulative GHG emissions through 2050 by about 1% more than the House version.
As President Obama called for U.S. leadership in clean energy technology in a speech at MIT Friday, up on Capitol Hill members of the U.S. Climate Action Partnership (USCAP) demonstrated how they’re already putting innovative ideas into practice.
At a Clean Technology Showcase, we joined six corporations and fellow USCAP members to present cutting-edge solutions to a low-carbon future. While the displays varied from solar shingles to renewably-sourced swimwear to advanced coal technology, all participants agreed that making these solutions mainstream requires enacting comprehensive energy and climate legislation. Economy-wide federal policies that put a price on carbon and deliver incentives for clean energy development and deployment are today’s big missing ingredient.
Instead of the policy talk more common to Capitol Hill, Friday’s event focused on existing and emerging solutions to our energy and climate concerns. It proved an uplifting view of the opportunities that a clean energy economy can deliver.