Can the Stimulus Package Boost the Green Economy?

The American Recovery and Investment
Act of 2009, better known as the stimulus package worth a heaping $787.2
billion, sought in part to put Americans back to work. With $71 billion
stipulated for energy and environmental incentives, and another $20
billion for green tax incentives, that funding has the potential to create a better environment,
and the jobs–in California and beyond–to work toward it.

The Congressional Budget Office (CBO) estimates that the package will
increase Gross Domestic Product by 1.4 to 3.8 percent by the fourth
quarter of 2009. In the process, that can create up to 2.3 million new
jobs, “green” ones included. In fact, $500 million have directly
been set aside for careers set in energy efficiency and renewable energy
fields.

How will–and can–this affect environmental innovation in California?
Some examples are more direct than others. Take NASA, which has some
of its largest research centers based in the Bay Area and Pasadena,
and is earmarked to receive $1 billion, including $400 million for climate change and other Earth science research. Other exact
uses of the funds remain unclear. Up to two billion could go toward Solar LA, Los Angeles’ plan
to utilize 10 percent of the county’s power by solar sources by 2020
and, as a bonus, create 31,000 jobs. Such a move–though the total funding
remains questionable until an exact breakdown occurs–is worth considering
amidst the job crunch; the U.S. Conference of Mayors has predicted that
134,000 jobs will be lost between now and the end of this year in LA
county, which is basically the second highest string of employment losses
behind New York.

While most of the money categorized for general environmental purposes
has yet to be divvied up, there are many more projects that stand to
receive it. For the Golden State, that means a lot of tough decisions
are in their hands, since states will oversee 69 percent of the stimulus money.

As reported in CAIVP earlier this month, Southern California Edison,
which services more than 10 million customers, may be investing $15
billion in alternative energy for its power grids. The stimulus money
would allow such ambitions to be brought closer to reality as $11 billion
has been set aside for “smart grid” activities. Innovative
green ideas such as California’s Million Solar Roofs Plan, with aims
of constructing 1 million solar rooftop installations over the next
next ten years, can apply for a small piece of $6.3 billion of loan
guarantees aimed at wind or solar projects.

Some scholars, writers, and organizations, such as the Heritage Foundation,
argue that money toward such projects is being misspent, as the creation
of these green jobs in the stimulus package could come at the poor cost
of other ones. However, correlating places like California with a high number
of green jobs and a weak economy is a logically flawed argument which
offers no proof. Furthermore, as academic studies have demonstrated, environmental policies in
California have created more jobs than they have eliminated.

Yet not all is environmentally pleasing about the stimulus package’s
environmental initiatives–or, in some cases, lack there of. Congress
scratched a $4.6 billion provision for carbon capture and sequestration
(CCS) technologies for coal-fired power plants. Vastly more money goes
into roads than public transit, to the point where some say it effectively “screws commuters” with its unequal allocation of $27 billion
for for highways versus $8.4 billion for transit and $3.4 billion for
rail. Still, the large amount that remains of the environmental funds are
still a good start if California really gives some thought as to what
organizations and plans are both in the largest financial crunch and
will benefit the most people down the line.

As UC Berkeley Professor
David Roland-Holst aptly
puts it
: “If investments
are made for the New Economy, enhancing productivity, long term employment
gains will follow.”

The money invested cannot fund all environmental
projects–nor should it–but it can allow existing ones to operate more
effectively and, ideally, with longer term social and environmental
benefits.