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Why Is Obama Investing In A Green Economy?
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One of the greatest challenges we face today is confronting global warming. The current global economic downturn adds a layer of complexity to the issue of how to address that challenge. But, it is clear that the Obama administration is addressing both problems simultaneously by placing energy policy at the center of its economic policy. But what does this really mean for every day Americans? Why should they be thinking about climate change even as they are losing their life savings and their homes?
The current economic situation is pretty dire 4.4 million people have lost their jobs since the recession began in December 2007, including 2.6 million in just the last four months. Moreover, the unemployment rate reached 8.1% in February 2009 and overall, economists estimate that more than 2 trillion dollars have been lost in retirement savings. By all accounts, we are looking at a long and brutal recession.
To get the economy back on its feet, the Obama administration passed the Recovery and Reinvestment Act. This bill aims to inject $787 billion into new programs and tax incentives to stimulate the economy. What’s interesting about this bill, however, is that unprecedented investments in clean energy are a central element of the recovery plan. For example, it allots $71 billion for clean energy programs or three times the current spending for these same programs. Additionally, this bill adds $20 billion in clean energy tax incentives. So why is this administration investing so much money on clean energy projects at a time when the economy should be it’s number one priority? Well, because investments in clean energy will save people money, will create jobs, will keep dollars here at home and will help ensure the long-term viability of our economy.
Low-income people spend a disproportionate amount of their budget on energy. The Recovery Act aims to invest in projects that will save people money and that will generate cheaper, cleaner energy. Under this administration’s recovery plan, an additional $5 billion are allotted to install efficiency measures in low-income households. This amount could weatherize 1 million homes and create 375,000 jobs. Low-income families will save an average of $350 annually in reduced energy costs. .
There are many ways in which the government can boost the economy but money spent on renewable energy and energy efficiency has been shown to create more jobs than spending in most other areas. A study by the Political Economy Research Institute at the University of Massachusetts released late last year, outlined that an investment of $100 billion dollars in greening the economy (investments in energy efficiency, clean energy and infrastructure) would yield 2 million jobs over a period of two years. They projected that this number is four times as high as the number of jobs that would be produced if that same investment were made in oil and gas production.
Not only do investments in greening the economy ensure the long-term viability of our economy, there is also an enormous economic cost to our oil dependence. By some estimates, last year, the US spent more than 500 billion dollars on imported oil. That money is contributing to our trade deficit and at the same time shipping money overseas instead of allowing us to spend that money here at home, rebuilding our economy.
By investing in greening projects, President Obama is lending a hand to people that need it most. It’s not some highfalutin endeavor –he’s trying to keep money in the pocketbooks of those people that need it most and he’s creating jobs that will get people through these tough economic times. We should continue forward with this effort.
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