Sunday, October 19, 2008

Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy


As the nation continues to debate its energy future, a new report released today shows that the U.S. can create two million jobs by investing in a rapid green economic recovery program, which will strengthen the economy, increase energy independence, and fight global warming.

Green Recovery – A Program to Create Good Jobs and Start Building a Low-Carbon Economy (pdf)
was prepared by the Political Economy Research Institute at the University of Massachusetts, Amherst, under commission by the Center for American Progress and released by a coalition of labor and environmental groups. The authors are Robert Pollin, Heidi Garrett-Peltier, James Heintz, and Helen Scharber of PERI.

Focusing for now on a short-term clean energy and jobs program, Green Recovery reports that a short-term green stimulus package would create two million jobs nationwide over two years. Later in the fall, PERI and CAP will co-publish a fuller study that addresses the longer-term challenges and opportunities created by building a clean-energy economy.

The short-term $100 billion green economic recovery package would:

  • Create nearly four times more total jobs than spending the same amount of money within the oil industry, and 300,000 more jobs than a similar amount of spending directed toward household consumption.
  • Create roughly triple the number of good jobs — paying at least $16 dollars an hour — as spending the same amount of money within the oil industry.
  • Reduce the unemployment rate to 4.4 percent from 5.7 percent (calculated within the framework of U.S. labor market conditions in July 2008).
  • Bolster employment especially in construction and manufacturing. Construction employment has fallen from 8 million to 7.2 million jobs over the past two years due to the housing bubble collapse. The Green Recovery program can, at the least, bring back these lost 800,000 construction jobs.

The green economic recovery program addresses the immediate need to boost our struggling economy and accelerate the adoption of a comprehensive clean-energy agenda through a $100 billion investment that would combine tax credits and loan guarantees for private businesses with direct public-investment spending.

The recovery program aims to boost private and public investment 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, and next-generation biofuels.

The report shows that the vast majority of the two million jobs would be in the same areas of employment that people already work in today, in every region and state of the country. For example, constructing wind farms creates jobs for sheet metal workers, machinists and truck drivers, among many others. Increasing the energy efficiency of buildings through retrofitting requires roofers, insulators and building inspectors. Expanding mass transit systems employs civil engineers, electricians, and dispatchers.

The study’s authors conclude that “we can be certain that the green recovery program will serve as a strong counterforce against pressures that are currently pushing unemployment up as well as more broadly increasing economic disparities. The green infrastructure investments proposed here will also generate significant long-term advances toward creating the clean energy economy that we need.”

The green recovery program investments would fund:

  • $50 billion for tax credits. This would assist private businesses and homeowners in financing commercial and residential building retrofits, as well as investments in renewable-energy systems.
  • $46 billion in direct government spending. This would support public building retrofits, the expansion of mass transit, freight rail and smart electrical-grid systems, and new investments in renewable energy.
  • $4 billion for federal loan guarantees. This would underwrite private credit that is extended to finance building retrofits and investments in renewable energy.
About the authors: Robert Pollin is Professor of Economics and Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst. James Heintz is Associate Research Professor and Associate Director of PERI. Heidi Garrett-Peltier and Helen Scharber are Ph.D. students in Economics and Research Assistants at PERI.