The green energy revolution may already be underway

Introduction

The idea of an “energy stimulus” is picking up momentum in the corridors of power, along with a fancy new title. Look for such a plan, perhaps going by the name of “green recovery” or even “green prosperity,” to be the first climate change initiative of the Obama administration and the newly bolstered Democratic leadership of the 111th Congress.

The most detailed run-down on a potential plan for a job-creation bill that will, not so incidentally, reduce reliance on fossil fuels, happens to have come out of the Center for American Progress (CAP). That’s the influential think tank headed by John Podesta until he took a leave of absence to lead President-Elect Obama’s transition team. The September report, authored by Robert Pollin and University of Massachusetts Political Economy Research Institute economists, says that a $100 billion investment over two years (one-seventh the cost of the financial sector bailout bill, for those counting) would create 2 million new jobs. These jobs would run the gamut, from weatherizing homes and schools to new mass transit and water infrastructure construction to solar and wind energy manufacturing.

This week, CAP further refined the vision — putting out a memo outlining $47.2 billion in short-term spending options, including money to go directly to citizens — $2.5 billion annual “cash for clunkers” program to get old, polluting autos off the road, and a $2,000 tax credit per household for purchase of energy-efficient appliances and insulation.

The whole approach tackles head-on the charges by the U.S. Chamber of Commerce, the National Association of Manufacturers, and the anti-corporate tax group American Council for Capital Formation, who argued that action on climate change would break the U.S. economy.

But CAP’s idea is not to replace, but merely precede, the more complex and politically difficult idea of setting mandatory limits on the nation’s emissions of carbon dioxide and other greenhouse gases.

Remarks Wednesday by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman, Democrat of New Mexico, at a carbon markets conference in Washington bolstered the outlook for a green-jobs-first approach. “I think it may take more than the first year to get it all done,” he said about the proposal for an economy-wide system of carbon dioxide limits, known as “cap and trade.” “My preference is to begin with energy legislation. There is no shortage of ideas that people would like to see us move ahead with.”

More proof that the “green recovery” idea has momentum: The conservative Heritage Foundation has mounted a full-frontal assault on the notion, with a policy paper suggesting that action to limit fossil fuels emissions will result in “gone jobs” rather than “green jobs.”