Clean energy investments for the U.S. economy

With the outcome of the American Recovery and Reinvestment Act of 2009 relatively positive with lower than expected jobs created but job losses slowing and GDP no longer shrinking and even growing again, attention is shifting to the federal budget proposed by President Obama which, in response to the activities of the past year, would offer more government support to economic stimulus efforts.

In light of the return to annual budget deficits beginning with $194 billion (2010 dollars) in 2002 and reaching $1.4 trillion in 2009, President Obama announced a federal budget that trims inefficient programs wherever possible, while he insisted that the government must continue to “lay a new foundation for lasting growth” and “build on the largest investment in clean energy history.”  Indeed, during today’s continued economic uncertainty, the federal government could perform a vital role in pushing the economy and investing in America – and that requires money.

“…energy efficiency and clean energy are the right thing to do for our future – because the nation that leads the clean energy economy will be the nation that leads the global economy.”  – President Obama, State of the Union 2010

The New York Times has a great visual for the federal budget in fiscal year 2010 (FY10) and FY11 for reference.  Take a look at the bottom right hand corner of that figure – energy.  One of those green areas refers to a modest increase (by 5 percent) of investments in energy efficiency and renewable energy.  Most of this money would fall under the Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE) with increases in support, for example, in cutting edge clean energy technology R&D (solar, wind, plug-in hybrid electric vehicles, and hydrogen and fuel cell technologies), state clean energy and energy efficiency programs, and international coordination and best practice sharing.  The US Department of Agriculture is also looking for a minor increase (less than 2 percent) from FY10 to support mainly biomass for biofuels (see: Red, White, and Green: Transforming U.S. Biofuels) but also biopower, i.e. biomass used for electricity.

Appropriations for EERE increased from $2.16 billion in FY09 to $2.24 billion in FY10.  For the next fiscal year, starting in October of 2010, Obama proposed a $120 million increase for EERE to $2.36 billion for FY11.  For some perspective, the Recovery Act of 2009 pumped $16.8 billion into energy efficiency and renewable energy – that’s nearly 8-times the planned 2011 budget.  A portion of this FY11 increase would address the problems the DOE has had in dispersing Recovery Act money to states – hiring and training the manpower needed to administer the funds at both the federal and state level.  For more information on the obstacles impeding weatherization efforts, check out this DOE inspector general’s report.

Investing in a clean energy economy is about planting the seeds to spur on and support innovation.  And, as DOE Assistant Secretary Cathy Zoi said recently at a briefing in Washington, D.C., government investment is about encouraging high impact innovation – exploration of cutting edge technologies, many of which will probably fail, but the few that succeed could become true game-changers.

Is this budget enough to turn the economic tides and re-ignite a struggling economy based on clean energy?  I don’t know.  But it certainly is another step in the right direction.

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