ACELA vs. Comprehensive Climate Legislation: Jobs, Jobs, Jobs
Posted February 7, 2010
My colleague, Andy Stevenson, recently wrote a nice blog outlining how and why America needs to lead the clean energy revolution by passing comprehensive climate and energy legislation. This blog expands upon a critical flaw with an energy-only bill: next to comprehensive climate legislation, it is a clear loser when it comes to job creation.
In November 2009, Senator Bingaman introduced his energy-only bill, ACELA (the American Clean Energy Leadership Act), and other legislators are likely to introduce their own. Unfortunately, past energy-only legislation, with its narrow and intermittent incentives, has only sparked piecemeal investment in clean energy. Fundamental change that would occur by placing limits on carbon pollution is needed to avoid continued investments in dirty and ultimately more expensive technologies. Only comprehensive climate legislation can provide industry with the long term profit incentives and financing mechanisms needed to achieve our climate and energy goals. Without this, dirty energy over clean will continue to be rewarded; sustained investment in renewable energy and energy efficiency won’t come. And this means far fewer jobs.
It is noteworthy that, when introducing his bill, Bingaman reported it would create 350,000-500,000 new jobs, much lower than estimates for comprehensive legislation. Moreover, this number included 125,000 renewable energy jobs. Analysis by the National Renewable Energy Lab, however, suggests that bills like this won’t increase renewables beyond business-as-usual. That might lower their figure to about 225,000-375,000. Even still, some provisions require appropriations that may not be approved. Climate legislation like the Waxman-Markey bill (American Clean Energy and Security Act, ACESA) passed last June by the House has guaranteed self-funding created by the market value of emission permits.
In contrast to an energy-only bill, comprehensive legislation would give us a much better return. Analyses by the Political Economy Research Institute (PERI) at the University of Massachusetts assessed jobs potential across the main areas of building retrofits, renewables, and advanced vehicles resulting from large-scale investments climate legislation would bring. PERI projects 1.7 million jobs per year for a decade, assuming an ongoing public and private investment of about $150 billion per year. This figure is NET of lost oil and gas employment displaced by clean energy jobs. Carbon-reducing activities in agriculture and forestry, as well as industrial energy efficiency opportunities, were not assessed in this analysis, so it might err on the conservative side. Another analysis of comprehensive climate and energy legislation projects 1.9 million new jobs. Finally, just from energy efficiency alone, the American Council for an Energy Efficient Economy estimates ACESA would create 600,000 jobs, one million with more aggressive efficiency provisions. It would also save households $486 per year by 2030, $832 under their more aggressive scenario. And none of these analyses take into account the benefits of enhanced oil recovery made possible from the capture of CO2—which could prevent trillions of dollars being sent overseas.
Economists Larry Summers (see page 10), Sir Nicholas Stern, and Nobel Prize winner Joseph Stiglitz - and many other respected scholars - know that comprehensive energy and climate policies offer us a real opportunity to get out of this recession, unlocking billions of private sector dollars, and breaking our addiction to foreign oil.
ACELA, and energy-only bills in general, won’t get the job done—they fail to sufficiently reduce oil demand or increase enhanced oil recovery; they fail to significantly reduce the billions of dollars we send overseas to hostile regimes, instead of investing them domestically; they don’t provide sufficient market incentives for clean energy innovation; they fail to unlock billions of dollars tied up in frozen capital markets. The result: only modest job growth, some of which requires approved appropriations. Most important, of course, is that they don’t provide any climate change protection. From every angle, comprehensive climate and energy legislation is a vital investment with an excellent return.