The Economic Benefits of Investing in Clean Energy
How the Economic Stimulus Program and New Legislation Can Boost U.S. Economic Growth and Employment
Study by Robert Pollin, James Heintz & Heidi Garrett-Peltier
The United States faces an enormous challenge—successfully managing the transformation from a carbon-intensive economy to becoming a predominantly clean-energy-based economy. This economic transformation will engage a huge range of people and activities. It is crucial for economic policymakers and the American people to understand the likely effects of the activities and policies enacted. Specifically, we need to gauge our success in curbing CO2 emissions alongside the broader effects on the U.S. economy, particularly on employment opportunities, economic growth and peoples' incomes.
This paper examines these broader economic considerations—jobs, incomes, and economic growth—through the lens of two government initiatives this year by the Obama administration and Congress. The first is the set of clean-energy provisions incorporated within the American Recovery and Reinvestment Act. The second is the proposed American Clean Energy and Security Act which is now before Congress. Our analysis in this paper shows that these measures operating together can generate roughly $150 billion per year in new clean-energy investments in the United States over the next decade. This estimated $150 billion in new spending annually includes government funding but is notably dominated by private-sector investments.
We estimate this sustained expansion in clean-energy investments triggered by the economic stimulus program and the forthcoming American Clean Energy and Security Act can generate a net increase of about 1.7 million jobs. This expansion in job opportunities can continue as long as the economy maintains a commitment to clean-energy investments in the $150 billion per year range. If clean-energy investments expand still faster, overall job creation will increase correspondingly. These investments could, therefore, not only guide us out of our fossil-fuel dependent crisis, but serve as a powerful engine of economic recovery and long-term economic vigor in the U.S.
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