Billions go to green tech
Posted: Wednesday, January 28, 2009 4:30 PM by Alan Boyle
San Diego Union-Tribune via Zuma Press
Joe Bartolomei and Lee Sterling of Solartistry Inc. install solar panels on the roof
of a home in Encinitas, Calif. The economic stimulus plan is expected to give a
boost to energy efficiency as well as renewable-energy technologies.
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A hefty portion of President Obama's $825 billion stimulus plan is aimed at generating a triple play for employment, energy and the environment: The House version of the bill, for example, would put more than $68 billion toward boosting America's green-tech sector, which could in turn reduce the average household's energy bill as well as our costly hunger for fossil fuels.
But will the triple play pay off? Some folks on the sidelines worry that billions of dollars could be wasted on technological dead ends, while others complain that all this spending is just a greener shade of pork.
The greening of American infrastructure
Job No. 1 for the stimulus package, also known as the American Recovery and Reinvestment Act, is generating jobs. The plan would follow through on Obama's campaign promise to do that by putting billions toward the greening of the nation's infrastructure (which is in a pretty dark place right now).
An analysis by the Center for American Progress, which is where most of Obama's ideas were fleshed out during the campaign, shows that the biggest chunk of the package's green spending - almost $31 billion - would go to increase the energy efficiency of federal facilities and low-income housing, plus rebates for energy-efficient appliances and green-job training programs. The package would more than triple the amount that the federal government is currently spending on this category, the center said.
This means that if you're considering an energy-related upgrade, you might want to wait to see what kind of aid will be available once the stimulus package is passed - particularly if you're in a lower income bracket.
When Obama laid out the plan last weekend, he said such measures would "save taxpayers $2 billion a year by making 75 percent of federal buildings more energy-efficient, and save the average working family $350 on their energy bills by weatherizing 2.5 million homes."
It would also create jobs: A report by the Center for American Progress and the University of Minnesota estimated that spending $100 billion on energy efficiency and renewable energy would produce 2 million new jobs in two years.
This part of the plan wouldn't break new ground, technologically speaking, according to Daniel J. Weiss, the center's senior fellow and director of climate strategy.
"What's been lacking is resources rather than technology, particularly in a retrofitting situation," he told me. "For federal buildings, you could be installing more energy-efficient windows, plugging leaks in the buildings, getting a more efficient heating, ventilation and air-conditioning system."
That means most of the green-tech jobs would go to contractors, electricians and other skilled laborers rather than, say, researchers and business executives. Even Joe the Plumber might find something to like.
Scientists - and particularly engineers - would be enlisted to prime the pump with greener technologies and cleaner vehicles. Among the priorities: research into advances in renewable energy (for example, solar and wind-generated electric power), carbon capture and sequestration, and support for cleaner diesel vehicles, better plug-in electric hybrids and better batteries. The House has set aside $8.6 billion for these categories, including $600 million to buy plug-ins and alternative-fuel vehicles for federal fleets.
Weiss said the legislation shifts the focus somewhat away from biofuels, which are currently not as affordable or available as experts would have expected a couple of years ago. "Given that problem, focusing on alternative fuels that already have an infrastructure built in for the delivery of that fuel - namely, electrical outlets - has more promise," he said.
Bottom line? Plug-in electric vehicles should get an extra boost toward the marketplace.
Speaking of electricity, the plan would allocate $19 billion for smart-grid technologies - innovations that range from smart meters in the home to upgraded transmission systems in the countryside. Another $10 billion would beef up the nation's mass transit systems.
Taking on the challenges
It all sounds great to Charles Vest, president of the National Academy of Engineering. A year ago, the academy announced a list of 14 Grand Challenges for Engineering, and Vest feels as if the Obama administration has picked up on the suggestions.
"Thematically, there's a lot of overlap between the engineering challenges and some of the things that are being started," he told me. "It's obvious that the No. 1 theme was clean, efficient, American energy. Several of the Grand Challenges fit into that."
Of course, the challenges were selected for long-term development rather than short-term stimulus. For instance, it's not likely that engineers will figure out how to provide cheap, commercial fusion power in the next couple of years (though there's always a chance).
"A jump start is really important," Vest said. "Simply getting engineers engaged in green technology has a lot of intrinsic value for the long term as well. Working on the grid ... moving on the efficiency front, retrofits and things like that ... these can literally be done overnight. Other areas, like the development of advanced batteries, is something that can use a big push. You can't guarantee that it's going to happen in a year or so, but you can certainly employ people in an area that has critical importance moving forward."
Green pork?
So what's not to like? House Republicans are wary about supporting so much spending, particularly on items that don't seem to benefit mom-and-pop businesses. The idea of spending money on new cars for federal agencies has been drawing some of the harshest fire.
House Minority Whip Eric Cantor, R-Va., specifically mentioned the purchase plan for alternative-fuel vehicles and plug-ins during an interview with NPR and said the American people expected Congress to stop pork-barrel spending. "Frankly, this bill doesn't rise to that standard," Cantor said.
Anne Korin, who is co-director of the Institute for the Analysis of Global Security and chair of Set America Free, has a different kind of worry: In the rush to pass a stimulus bill that makes billion-dollar bets on future energy technologies, some of those bets may end up being misplaced.
Like Cantor, she pointed to the vehicle purchase plan as an example. "When you look at that, that may on the surface sound good, but the devil is in the details," she said. Would the vehicles have to be purchased before the next generation of plug-ins hits the market? Should the money go toward buying the whole vehicle, or should it be stretched out to cover only the extra cost of going with the greener technology? Should the tax breaks being given for new hybrid vehicles be extended to plug-in conversions as well?
"It would be desirable to slow down and make sure there's a chance to actually analyze these expenditures," Korin said.
Looking ahead
Weiss agreed that the stimulus spending had to be monitored to make sure it was going toward the most appropriate technologies. "You don't want everybody buying Beta when the rest of the world is going VHS," he said. (For the young kids out there, that's an analogy from the bygone days when most people actually watched videos on tape - think of it as Blu-ray vs. HD DVD.)
You don't want the stimulus money sitting on a shelf while the technology sorts itself out, either. The Congressional Budget Office raised precisely that concern this week, saying that a big chunk of the money in the stimulus package wouldn't be spent before fiscal 2011. As you'd expect, the White House has taken issue with that analysis.
In any case, House action on the package is just an early step along the way. The Senate has to weigh in as well, and the green-tech effect may end up looking a lot different by the time the bill gets out of Congress. The Senate Appropriations version, for example, would allocate $40 billion for "the development of clean, efficient, American energy" and $2.6 billion for alternative-fuel cars in the federal motor fleet. (Cosmic Variance's John Conway has more on the science stimulus.)
Weiss said the green stimulus spending would be merely the first step in Obama's three-step agenda for energy and the environment.
"There will be an energy bill that begins after the stimulus package," he said. "This will be done in late February or March and April. It's more likely that what you'll have is policies like renewable electricity standards and [policies aimed at making it] easier to build transmission lines."
Weiss said the third step will be the big one: a cap-and-trade system for greenhouse-gas emissions - the type of system that former Vice President Al Gore called for just today during a Senate Foreign Relations Committee hearing.
Will that cap-and-trade system look like what Obama proposed during the campaign, with the aim of reducing emissions to 1990 levels by 2020? It's too early to tell: After all, the guy's been in the White House for only a week.
