Republicans Want to Cut Obama’s Green Energy Plan Down to Size
Obama's Team Wants to Foster Green Energy and Clean Tech
The July 4th holiday is bringing out the fireworks. But the biggest features are in the political realm, where the House Republicans are now trying to cut President Obama’s green energy program down to size, saying it has “failed.”
It’s the tale of two political parties. Both sides are trying to get out ahead of the curve, all before the presidential campaign begins in earnest after their respective summer conventions. To start the rally, the Republicans are saying that the president’s nearly $1 trillion stimulus plan has distorted the economy and prevented a full recovery while the White House counters that the green economy must be nurtured and supported initially with public funds.
“For 40 consecutive months and counting, the United States has endured a national unemployment rate higher than 8 percent, and speculation about the role of stimulus-funded programs continues unabated,” say House Energy and Commerce Committee Republicans, in a report. “The European nations that once were ahead of the U.S. in adopting green jobs programs are now ahead of the U.S. in abandoning them. It is time for America to do the same.”
The same critics are emphasized that the cost of each job is staggering. They are suggesting to divide the total stimulus dollars by the number of jobs created. If that money were targeted elsewhere, they add that the country would have gotten more bang for its buck.
Case in point: Solyndra, the failed solar company that received a $535 million loan guarantee backed by taxpayers. Beyond Solyndra, there are the bankruptcies of Evergreen Solar and SpectraWatt, as well as that of energy storage maker Beacon Power, which actually found a buyer.
House Republicans are arguing that not only are those businesses unsustainable without government subsidies but that they are also unproductive. A 2009 study from Madrid’s King Juan Carlos University found for every green job the government creates, 2.2 jobs are lost in competing industries. That is because factories will downsize to compensate for higher energy costs.
“It clearly hasn’t created many jobs, and when its direct and indirect impacts are taken into account, it may well be costing them,” say those House members.
The Flip Side
The Obama administration says that it will take its case to the American people, pointing out that fossil fuels have been heavily subsidized for generations and that the creation of a New Economy does not happen overnight. It adds that China and India are aggressively pursuing those same strategies and that this country must “play to win.”
It is calling attention to research done by the Pew Charitable Trust, which is showing that global investment in clean technology is at a record $263 billion. Annual investment growth rates are between 10 percent and 18 percent in the developing world, which includes not just Asia but also Africa, the Middle East and Latin America.
“Investments in wind, solar and improved energy efficiency are creating well-paying jobs for people of all skill levels and educational backgrounds,” says the Pew report. “These investments will revitalize not only the economy, but also help protect the global environment.”
As for the loan guarantees targeted to green industries that the House Republicans have profiled as both wasteful and politically motivated: The Obama administration says that they have injected $55 billion into local economies while at the same time, they are generating enough clean energy to power every home in the state of Colorado.
And while investors may be drawn to green energy projects that are able to produce steady cash flows, they are requiring a nudge from the government. To that end, the loan guarantees in combination with the stimulus have proven that large-scale wind, solar and geothermal projects can be commercially successful. That indicates to lenders that it is safe to issue those loans, Obama says.
The non-partisan Congressional Budget Office assessed the president’s stimulus plan. It estimates that Gross Domestic Product has risen between .8 percent and 2.5 percent more than if no stimulus plan had been enacted. It adds that unemployment is .5 percent to 1.6 percent less than what it would have otherwise been, increasing the number of working Americans by 1 million to 2.9 million.
The clean energy race is now part of the presidential race. Republicans are saying that the free market should determine which fuels take the lead while the White House is arguing that clean technology will prevail over time, producing healthy results for both the economy and the ecology.
EnergyBiz Insider is named a 2012 Finalist for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been named one of the Top Economics Journalists by Wall Street Economists.