For the
past year, the U.S.
economy has suffered through a serious economic slowdown caused by the collapse
of the housing market bubble, the destabilizing effects of the housing
implosion on financial markets, and the sharp rise in oil prices. The resulting
increase in unemployment—reaching 5.7 percent in July 2008—is in fact even
worse when taking into account a labor market where people are working fewer
hours than they wish, taking pay cuts, or becoming discouraged from looking for
work. What’s more, most evidence suggests the slowdown will continue for at
least another year, extending in exaggerated form an eight-year pattern of
economic performance that has done little for most Americans.
This
report outlines a green economic recovery program to strengthen the U.S. economy
over the next two years and leave it in a better position for sustainable
prosperity. In the pages that follow, we detail how to expand job opportunities
by stimulating economic growth, stabilizing the price of oil, and making
significant strides toward fighting global warming and building a green, low-carbon
economy. This green economic recovery program would be a down payment on a
10-year policy program recommended by the Center for American Progress in its
2007 “Progressive Growth” series, which lays out an economic strategy for the
next administration and includes the report, “Capturing the Energy Opportunity:
Creating a Low-Carbon Economy,” by John D. Podesta, Todd Stern, and Kit Batten.
That report details how the transformation to a low-carbon economy would result
in sustainable economic growth. (See Appendix 4 on page 28 for details of this
plan).
By accelerating the
implementation of these polices, we address our immediate need to boost a
struggling economy and jumpstart our long-term transformation to a low-carbon
economy. This green economic recovery program would spend $100 billion dollars
over two years in six green infrastructure investment areas. These are all
areas that the CAP report outlined as key to transitioning to a low-carbon
economy to create new green jobs—particularly in the struggling construction
and manufacturing sectors. They are also all central to securing America’s
energy security and combat global warming. This $100 billion initiative is part
of a comprehensive low-carbon energy strategy and could be paid for with
proceeds from auctions of carbon permits under a greenhouse gas cap-and-trade
program. This fiscal expansion would create 2 million jobs by investing in six
energy efficiency and renewable energy strategies:
Retrofitting buildings to improve
energy efficiency
Expanding mass transit and
freight rail
Constructing “smart” electrical
grid transmission systems
Wind power
Solar power
Next-generation biofuels
This economic
recovery program combines the $100 billion fiscal stimulus with an additional
credit stimulus—through a federal loan guarantee program to boost
private-sector investment in energy efficiency and renewable energy. Most of
the federal spending would be in the form of public infrastructure investments
in public building retrofits, public transportation, and building smart grid
systems because the money to support these activities can be delivered
relatively quickly by the federal government, and through the federal
government to state and local governments. Investments in renewable energy and
energy efficiency are also central to this proposal, and would be funded
through a combination of public funds, tax credits, and loan guarantees to spur
private-sector investment.
