Monday, November 3, 2008

Green Stimulus Part 2: Basic Elements

The Center for American Progress released the Green Recovery, a government stimulus program to create good jobs and start building a low-carbon economy. According to the release, government investment could be repaid by future carbon cap-and-trade revenues. The report indicates that spending $100 billion over two years would create 2 million new jobs, reduce pollution and US dependence on energy imports.

Funding six energy efficiency and renewable energy strategies:
1. Retrofitting buildings to increase energy efficiency
2. Expanding mass transit and freight rail
3. Constructing "smart" electrical grid transmission systems
4. Wind power
5. Solar power
6. Advanced biofuels

Infrastructure investment program: This program can ceate 2 million new jobs nationwide over two years and reduce the unemployment rate to 4.4 percent. The Green Recovery program can get back the 800,000 construction jobs that were lost and provide opportunities to rebuild career ladders through training and workforce development. Moderating domestic energy consumption through green building and retrofits will also put downward pressure on the price of energy. This program can spur reconstruction of local communities and public infrastructure all across America, setting us on a course for a long-term transition to a low-carbon economy that increases our energy independence and helps fight global warming.

Funding mechanisms: Tax cuts totalling $50 billion would assist private businesses and homeowners to finance both commercial and residential building retrofits, as well as investments in renewable energy systems. Direct government spending totalling around $46 billion would support public building retrofits, the expansion of mass transit, freight rail, smart electrical grid systems, and new investments in renewable energy. Federal loan guarantees of around $4 billion would underwrite private credit that would be extended to finance building retrofits and investments in renewable energy. The plan also has $26 billion for retrofitting 20 billion square feet of public buildings in the US. Public building retrofits have the most potential for operating at a large scale within a short time period. According to the report, the average payback period for these investments would be about five years. Spending $26 billion would generate cost savings on energy of about $5 billion per year, which means that total savings would exceed $26 billion roughly five years after the retrofits were conducted.

An Envirowonk article suggests that rail electrification of the major routes, "would, in less than a decade, reduce direct oil use by 250,000 barrels/day due to displacing diesel fuel power trains. It would improve capacity (with no other changes) on the rail by about 15 percent due to better braking and acceleration of rail systems. And, it would offer the chance to move cargo from truck to rail, even further reducing oil use. In addition, the railroad right-of-ways could become the routes for HVDC (high-voltage direct current) cabling to move electricity (renewable electricity) efficiently around the country."

Changing building codes and changing the rules on combined heat-power (CHP) would help spark investment and economic activity today financed by tomorrow's energy savings and power production. Staying within the traditional concepts of cost/benefits, green buildings see far higher productivity (better lighting, improved employee health and retention, lower absenteeism) in addition to the lower operating costs (which are not just 'energy', but also water and often maintenance). And, those productivity improvements are typically an order of magnitude greater than the value of the energy savings.

The benefits of greening schools include the reduced operating costs, improved student performance, reduced absenteeism, improved comfort and better lighting. Their is immeasurable value to the improved student performance, alone.

The building of green infrastructure offers a better future, while providing real opportunities and payoffs. This type of stimulus package will not only create near term green investment, it will also strengthen economic security, national security, and environmental security.

Next: Obama's Green Stimulus

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