By Jesse Jenkins and Devon Swezey

A slew of critical news articles about a clean energy stimulus program have suggested both that the program is a government boondoggle and that the Obama Administration has inflated the number of jobs supported by the program. Both contentions are misleading.

One article published by MSNBC, titled "Hot air? White House takes credit for Bush-era wind farm jobs," begins this way:

"The Obama administration is crediting its anti-recession stimulus plan with creating up to 50,000 jobs on dozens of wind farms, even though many of those wind farms were built before the stimulus money began to flow or even before President Barack Obama was inaugurated."

It is true that some of the projects that received funding under the stimulus-funded Section 1603 cash grant program went to projects that had completed construction prior to the stimulus bill. The MSNBC article, written by journalist Russ Choma, notes that 11 of the 70 major wind farms that received grants had erected their wind towers during the Bush Administration.

The problem is that this fact fundamentally misses the point.

Continue reading "Media Controversy Over Stimulus-funded Clean Energy Grant Program Lacks Substance" »

By Jesse Jenkins and Devon Swezey

The American Recovery and Reinvestment Act has funded breakthrough innovation and new growth industries that are driving down the cost of clean energy and building the foundation for competitive 21st century U.S. industries, according to a new White House report released today on the impacts of the U.S. stimulus bill.

The report, "The Recovery Act: Transforming the American Economy Through Innovation," is notable for highlighting the multifaceted and relatively comprehensive clean economy strategy now underway with stimulus investments, and for the Administration's welcome focus on making clean energy cheap.

Yet while the White House report highlights the considerable clean energy momentum established by the Recovery Act, it also inadvertently raises the specter of an impending clean tech funding cliff which risks sending U.S. clean energy industries into deep freeze as stimulus funds begin to expire over the coming months.

Continue reading "White House Report: Stimulus Driving Clean Energy Innovation, Manufacturing, Markets - But What Comes Next?" »

According to a recent IEA report, the U.S. is not alone in facing the possibility of a clean technology R&D funding cliff. The report documents an uptick in global clean energy R&D investment in 2009 as a result of country-level stimulus packages, but the author of the report cautions that investment on this level must be built upon, not allowed to drop off.

Andy Revkin at Dot Earth reports:

According to the [IEA] report, "Global Gaps in Clean Energy RD&D," the recent burst of spending on research as part of various countries' efforts to stimulate their fragile economies has helped provide a substantial boost after decades of diminishing investment on the frontiers of energy inquiry. But the report's author, Thomas Kerr, warned that this was a transitory pulse when sustained growth was needed, particularly given signs that no global price on carbon dioxide emissions was likely any time soon. In essence, the report says, the $24 billion in such spending in 2009 needs to be the new floor for such investments, not a temporary peak.

The report describes how India, despite its poverty, has moved ahead with an initiative for raising money for energy research that the United States -- thanks to a lack of leadership, congressional polarization and fear of anything remotely resembling a tax -- has so far been unable to do: India has created a National Clean Energy Fund for research and innovation financed by a levy of $1.10 (U.S.) per metric ton of mined or imported coal. It's a very modest fee that has created hundreds of millions of dollars to stimulate Indian research and testing of promising technologies.

Click here for more on India's National Clean Energy Fund.

Just to put this level of global investment in perspective, Green and Galiana have called for $100 billion investment in clean energy RD&D annually for the rest of the century and Energy Technology Perspectives 2010 calls for an additional investment of $46 trillion if we intend to halve carbon emissions by 2050.

Breakthrough President Michael Shellenberger comments in an MSNBC report on why energy efficiency efforts in the economic stimulus package have not delivered jobs as promised.

As the Obama administration promotes a second home energy-savings program -- a $6 billion rebate plan -- some experts are asking whether that will pay off for homeowners or for the planet.

"A very rosy picture was painted that energy efficiency would be a great way to create jobs and save money," said Michael Shellenberger, an energy expert who heads the Breakthrough Institute, an Oakland-based think tank that is financed by nonpartisan foundations and works on energy, climate change and health care issues. "The Obama administration risks overpromising again."

A new report by the Breakthrough Institute and the Information Technology and Innovation Foundation, "Rising Tigers, Sleeping Giant," is the first to thoroughly benchmark clean energy competitiveness in four nations: China, Japan, South Korea and the United States.

Developing better and cheaper clean energy technologies will be central to addressing climate change, securing U.S. energy independence, and creating new clean energy jobs. Increasingly, nations are seeking to gain competitive advantage in this rapidly growing, high-technology sector and the stakes for the United States are significant: will the United States largely be an importer of these clean technologies and lose the jobs related to them, or can America emerge as a global leader, driving exports and high-wage jobs?

The report analyzes clean energy investments and public policy support for research and innovation, manufacturing, and domestic demand, with a particular focus on six key technologies: wind, solar, nuclear, carbon capture and storage, hybrid and electric vehicles and advanced batteries, and high-speed rail.

Please join the Breakthrough Institute and ITIF for a discussion of the report's findings at a briefing hosted by the Senate Committee on Energy and Natural Resources on November 18th, 2009.

Date: Wednesday, November 18, 2009
Time: 10:30 AM - 11:30 AM
Location: Washington, D.C. - Senate Energy Committee Room, Dirksen Senate Office Building (SD-366)

Moderator and Presenter

Robert Atkinson (bio)
President, The Information Technology and Innovation Foundation

Guests

Congressman Rush Holt (D-NJ, bio)

Congressman Ron Klein (D-FL, bio)

Presenters

Jesse Jenkins (bio)
Director of Energy and Climate Policy, The Breakthrough Institute

Michael Shellenberger (bio)
President, The Breakthrough Institute

William G. Morin
Director, Government Affairs, Applied Materials

A recent RAND Review provides a slew of recommendations to help China expand the Tianjin Binhai New Area (TBNA) and turn it into a driver of economic progress. As a result of an enormous stimulus package (second only to that of the U.S.) with significant allocations for "indigenous innovation" in science and technology, China may already be well on its way to taking those suggestions to heart, particularly in the clean energy sector.

Tianjin Binhai New Area (TBNA), located in China's Bohai Rim region, has been a strong center for modern industry and manufacturing. But in 2006, the Chinese government mandated that TBNA become the next "regional engine for economic growth." To that end, the area has been the beneficiary of significant government support aimed at making the area the country's next "economic powerhouse" and orienting it towards leadership in providing solutions to national problems: among them, rising energy demand.

According to RAND:

"The goal of TBNA is to present an alternative to the traditional industrial economy, offering China a model of sustainable development and eco-friendly industry. Innovation in science and technology lies at the core of this vision of economic and environmental development."

In the report, RAND offers TBNA guidance in its endeavor to meet China's growing technology needs, both domestically and internationally, by recommending that it pursue seven emerging technologies including cheap solar energy and electric-hybrid vehicles.

Continue reading "RAND: Chinese Region Slated to be Emerging Technology Powerhouse" »

By Yael Borofsky and Jesse Jenkins

"The money is coming back,"

That's what Ethan Zindler, head of New Energy Finance Ltd, proclaimed to the Wall Street Journal in response to emerging evidence that the government's $3 billion dollar cash grant renewable energy stimulus program is successfully incentivizing private investment in the wind sector.

After falling into the doldrums for the past six-months, the wind industry is roaring back to life thanks to direct public investments enacted in the American Recovery and Reinvestment Act (ARRA), also known as the stimulus bill. A DOE and Treasury-funded cash grant incentive program is helping to grease the pipeline for private investors looking to finance renewable projects, particularly wind farms, slated to begin construction in 2009 or 2010. According to the WSJ, just four weeks into the program $800 million in grants have already been submitted and Wall Street bankers predict that figure to reach $10 billion by the end of 2010.

The cash grant program was created to rescue the clean energy industry, a critical American growth sector, from the malaise of the credit crisis. The tax credits (PTC and ITC) that usually incite clean energy development are worthless in an economic climate where the big financial firms that typically absorb them, on behalf of project developers, are in crisis.

The solution: Congress tucked a two-year cash grant into ARRA worth 30% of qualifying wind, solar, and geothermal project costs, replacing the normal production and investment tax credits. With the money from the program officially flowing since August, the grants are breathing new vigor into clean energy investment, speeding America's economic recovery.

With big players like Morgan Stanley and Citigroup investing $120 million each to finance new wind farms, the wind sector is generating more than clean energy - it's producing clear evidence that public investment really does drive private investment. By covering 30% of a new project's cost, the cash grant program will spur more than two dollars in private investment for every public dollar, successfully leveraging taxpayer money to drive significant private investment in cleaner energy, greater energy security, and accelerated economic recovery.

The projected success of the cash grants, which bankers calculate will lead to 9-15% annual returns per deal, suggests that perhaps, public investment is even more effective at driving private investment than setting an economy-wide carbon price, an oft-suggested strategy to motivate private financing in renewable RD&D.

Continue reading "Wind in Wall Street's Sails: Investment Rushes Into Wind, But Can We Make It Last?" »

By Johanna Peace, Breakthrough Fellow

It's strange to hear of "insourcing"--the transfer of manufacturing jobs into the United States instead of out--but that's exactly what's happening with Denmark's wind giant Vestas, according to a New York Times article yesterday.

According to the report, a combination of global recession and domestic stimulus spending on clean energy is adding up to a boon for the American clean energy manufacturing industry.

In Europe, Vestas has seen several nations slow down their rates of added wind capacity, and flagging government support combined with financial difficulties has impeded the construction of new projects. By contrast, the United States built 8,500 megawatts of wind capacity in 2008 to Britain's 500, and demand for turbine technology is high. So for opportunities in a more robust wind market, Vestas has begun to look across the Atlantic.

Continue reading "US Must Not Blow Its Chance as Foreign Investments Bring Wind Jobs Ashore" »

By Johanna Peace, Breakthrough Fellow

In New Delhi today, Indian Prime Minister Manmohan Singh said that India must invest in both new and existing clean energy technologies in order to develop sustainably over the coming decades. This comes as the latest indication of India's progress on building a domestic clean energy economy through investment--a strategy that could also serve as a new approach to international climate policy. Unfortunately, Western nations that stall climate negotiations with their insistence on setting carbon caps continue to miss the world's best chance at forging a global agreement.

Continue reading "Indian Prime Minister Says India Must Invest in Clean Energy Technology" »

By Yael Borofsky, Breakthrough Fellow

Last Thursday, the Department of Energy announced a boost for the advanced energy manufacturing industry in the form of a $2.3 billion Advanced Energy Manufacturing Tax Credit (MTC). The MTC is authorized under the American Reinvestment and Recovery Act of 2009 (ARRA), otherwise known as the $787 billion economic stimulus package.

Intended to expand the clean energy domestic manufacturing industry, the MTC provides a 30% credit for investments in advanced energy manufacturing facilities that either are new, expanded, or re-equipped. The $2.3 billion in MTCs will stimulate 7.7 billion in total capital investments in new renewable and advanced energy manufacturing projects. By fostering growth of the clean energy manufacturing industry, this investment will enforce and enhance ARRA's larger purpose - boosting economic growth, creating jobs, and securing "American leadership in the clean energy sector" - all while helping reduce greenhouse gas (GHG) emissions.

According to Energy Secretary Steven Chu:

These tax credits will help create thousands of high quality manufacturing jobs in some of the highest growth segments of the economy. This is an opportunity to develop our global leadership in clean energy manufacturing and build a secure, sustained base of jobs for America's workers.

The application process to receive the tax credits began last Friday and the preliminary deadline is September 16, 2009. Applicants will be offered tax credits based on expected commercial viability, and rankings of expected job creation, reduction of pollutants and GHGs, technological innovation, and speed of project implementation.

Continue reading "ARRA: DOE Announces $2.3 billion in Tax Credits for Clean Energy Manufacturers" »

On Monday, Joe Romm of Climate Progress publicly attacked the Breakthrough Institute for publishing an op-ed in the San Francisco Chronicle -- called "Will America lose the clean energy race?" -- which urged Congress to fully fund President Obama's energy education initiative and scale up direct pubic investments in clean energy to boost U.S. economic competitiveness and accelerate the nation's transition to a clean energy economy.

Romm never mentioned the central focus of the op-ed -- President Obama's energy education program (RE-ENERGYSE) and the Breakthrough Institute's efforts to rally support behind this program -- and instead attacked it for what he calls "willfully misleading nonsense" about Asian countries' planned investments in clean energy, while apparently defending the smaller investments in the proposed Waxman-Markey American Clean Energy and Security Act.  

Romm asserts that the op-ed "attacks" President Obama and Democratic leaders, when in fact the op-ed is aimed at supporting the President's RE-ENERGYSE program and calling for larger public investment in clean energy to compete with Asian challengers.  The RE-ENERGYSE initiative is currently in danger of being cut by Congress at a time when the U.S. is severely lagging in energy science and technology education, and last week the Breakthrough Institute organized over 100 universities, student groups and other organizations to submit a letter urging Congress to fully fund the initiative.

Romm makes several factually incorrect statements about Asia's plans for clean energy investment that contradict research in publicly accessible reports and analyses, including those by the Center for American Progress (which employs Romm).  Here is a fact check to correct Romm's misstatements and clarify the details of investment plans in Asia:
    
1.  The op-ed states, "China alone is reportedly investing $440 billion to $660 billion in its clean-energy industries over 10 years."

Romm's response:

"the China figure -- while it is certainly impressive and definitely should motivate U.S. action (as I have argued) -- is "reported" and cumulative over 10 years.  It is part of their stimulus and NOT just R&D, but an investment in clean-energy industries broadly defined"

Facts: China's planned investment of $440-$660 billion over 10 years is indeed part of an economic stimulus package, but not the original $586 billion stimulus that is passed late last year, as Romm implies.  The new investment, according to a recent paper by Andrew Light and Julian Wong of the Center for American Progress (CAP), is part of a planned second stimulus package that is "dedicated solely to new energy development over the next decade, including generous investments in wind, solar and hydropower."  China is planning to make a sustained commitment to clean energy investment by building on the clean energy investments in their first stimulus package rather than being content with a one-time investment. 

China's massive clean energy investment plan is indeed "reported," or planned.  A top source for Breakthrough Institute's figures are analysts at CAP, who have repeatedly published the same figures, including recently in Congressional testimony.  These numbers were reported early by the AFP and have since been republished several times, including recently by the Washington Post in an article similar to Norris' and Jenkins' op-ed, titled "Asian Nations Could Outpace U.S. in Developing Clean Energy."

The Breakthrough Institute has never suggested that China's investment is centered solely around R&D, nor have we suggested that U.S. clean energy investments should be solely focused on R&D, despite Romm's ongoing effort to misrepresent our position, which strongly supports direct public deployment of clean energy technology (see here for a summary of Breakthrough's clean energy investment policy recommendations). 

Continue reading "Joe Romm Ignores Facts in Attacking Breakthrough Institute Op-Ed" »

By Johanna Peace, Breakthrough Fellow

With this week's letter urging Obama to ensure "stable support" for a Clean Energy Technology Fund in the climate bill currently before the Senate, America's top scientists and energy experts signaled that the scientific community will hold Obama to his promise of investing $150 billion in clean energy research and development.

The names on the letter represent a virtual who's who of the upper echelons of the American scientific community, led by former Federation of American Scientists Board Chairman Burton Richter. Its supporters include Dan Reicher, director of climate change and energy initiatives at Google, former special assistant to the Energy Secretary during the Clinton administration, and a former candidate for Energy Secretary under Obama.

These science and energy experts are insisting that the American Clean Energy and Security Act (ACES) be strengthened from its current form, which would invest just one-fifteenth of the $15 billion per year Obama pledges for clean energy R&D in his current policy plans. "This is a serious deficiency," the letter warns.

Continue reading "Will Obama Break His $150 Billion Promise?" »

By Johanna Peace, Breakthrough Fellow

This week, South Korea has upped the ante for green public investment as it continues to make swift progress toward becoming a clean-tech economy. Already, a staggering 80% of South Korea's $38 billion stimulus package has been earmarked for green investments.

And today, the South Korean government announced that it will invest $85 billion more over 5 years to encourage the growth of green industries and technologies. That's more than doubling South Korea's recent promise to invest $40 billion over five years in a "Green New Deal," and the equivalent of 2% of the East Asian nation's total GDP. If the United States were to invest a comparable share of it's national wealth in clean energy technology, the sum would total over $275 billion annually.

Continue reading "South Korea to Invest $85 billion in Green New Deal" »

By Johanna Peace, Breakthrough Fellow

By mid-July, China will begin construction of a massive wind farm project in the northwestern Gansu province, at a total cost of US $17.6 billion. It will be China's biggest wind power station yet; according to local Development and Reform Commission official Wu Shengxue, it will reach an installed capacity of 20 GW by 2020. Eventually, the wind power capacity of the area is projected to reach 40 GW.

This development is the latest in what has recently been a major push by the Chinese to expand renewable energy use. Soon, Chinese officials are expected to reveal a new renewable energy stimulus plan of US $44-$66 billion per year over ten years, which will focus much of its resources on wind power. Under the plan, China will be on track to reach 100 GW of wind power capacity by 2020--more than eight times its current level.

By contrast, the American Clean Energy and Security Act invests only $6-12 billion per year in clean energy. As for the US "green stimulus," it includes a one-time clean energy spending boost of $112 billion--just half of China's $221 billion stimulus investment in green initiatives. Here's a sense of scale: If US investments in clean energy were on par with the Chinese in terms of percent GDP, we'd be spending $140-210 billion per year.

Continue reading "China to Build World's Largest Wind Project" »

[Updated 5/22/09: the ACES bill now includes a $10/ton price floor for auctioned pollution permits. The analysis below has been updated to reflect that change in the legislation]

Today, the House Energy and Commerce Committee began markup of the American Clean Energy and Security Act of 2009 (ACES). The bill promises to cap and reduce carbon pollution, create clean energy jobs, and spur technology innovation. Unfortunately, as our analysis of the use of carbon pollution allowances in the ACES bill revealed, the bill is on course to invest very little of the hundreds of billions of dollars in value created by the bill's cap-and-trade program over the coming years towards those objectives.

Most of the allowance value (74 percent) created by the ACES cap and trade program is dedicated to blunting the impact of the carbon price established by the program on industries and consumers (and securing the critical swing votes on the committee representing these entrenched energy and industry interests). In contrast, just 12 percent of the allowance value is dedicated to clean energy investments, broadly defined.

At an average allowance price of $10 to $20 dollars per ton of CO2 between 2012-2025, that would amount to clean energy investments of just $6-12 billion per year, and just $490-980 million for clean energy R&D (see our full analysis of the allowance allocations in ACES for more).

President Obama has repeatedly promised to, "Invest $150 billion over ten years in energy research and development to transition to a clean energy economy" (from WhiteHouse.gov). The President's 2010 Budget Outline specifically dedicated $15 billion per year in new revenue generated by a cap and trade program to this purpose. Yet the bill before us, depending on the allowance value it establishes, would invest just one-fifteenth to one-thirtieth of the $15 billion President Obama has pledged -- and specifically requested from Congress. Furthermore, this new energy R&D spending may amount to just a ten percent increase in current federal energy R&D budgets.

Likewise, the total investments in a new clean energy economy, more broadly defined, are an order of magnitude smaller than proposals advanced by the Breakthrough Institute, Apollo Alliance and others have deemed necessary to drive clean energy innovation, create millions of new energy jobs, and jump-start a prosperous, clean energy economy.

Below the fold, you can see how the clean energy investments made by the ACES bill compare with what a range of proposals and current R&D funding levels...

Continue reading "Climate Bill Analysis, Part 2: Clean Energy R&D Investment May Be 30 Times Smaller than President Obama's Budget" »

James K. Galbraith has a tour de force piece in the Washington Monthly on the economic and financial crises, what's at their core and what's necessary to move forward.

Galbraith echoes and reinforces many of the criticisms and recommendations Breakthrough has been offering on the economy for the past six months: more public spending (a lot!); nationalize the banks so they can be cleaned up and re-privatized; and ultimately, spark a new engine of economic growth in the birth of a new clean energy economy.

Galbraith isn't shy either about criticizing President Obama and Treasury Secretary Geithner for stimulus.  It's not bold enough, it reflects the middle of the road economic consensus (and is therefore too timid), and it reflects a misguided attempt at bipartisanship.  Here's the choice quote there:

Second, the new team also sought consensus of another type. Christina Romer polled a bipartisan group of professional economists, and Larry Summers told Meet the Press that the final package reflected a "balance" of their views. This procedure guarantees a result near the middle of the professional mind-set. The method would be useful if the errors of economists were unsystematic. But they are not. Economists are a cautious group, and in any extreme situation the midpoint of professional opinion is bound to be wrong.

Continue reading "Galbraith on the Economy: Time to Go Big or Go Home" »

Investments in clean energy innovation offer the nation's "best strategy" for economic recovery and "the only route to the breakthrough technologies we need" to tackle the nation's pressing energy and climate challenge, said MIT President Susan Hockfield today at a speech delivered at the White House.

Hockfield, an outspoken champion of clean energy innovation, spoke at the invitation of President Obama, who followed Hockfield's remarks with a speech outlining his plans to make unprecedented investments in clean energy technology and innovation.

"[S]ince World War II, by far the largest and most important source of US economic growth has been technological innovation, much of it springing from federally funded ... research," Hockfield said, echoing much of the work we've done at the Breakthrough Institute to advance public investments in clean energy innovation.

Facing both economic recession and pressing energy and climate challenges, clean energy innovation is critical, Hockfield argued:

"The R&D and technology investments that President Obama proposes have equally profound potential as an economic catalyst. That would be good news in any economy. But today, it provides a lifeline. ...

Not incidentally, these same investments [in energy innovation] also offer the only route to the breakthrough technologies we need to address the daunting challenges of energy security, rapidly accelerating energy demand and climate change."

In January, Teryn Norris and I cautioned about the "Danger of Green Stimulus" and called for "a shift from green jobs to a broader focus on green technology," a called echoed by Dr. Hockfield in the inspirational conclusion of her remarks:

"In hard times, America always invents its way to a brighter future. We have done it before, and we can do it again. For Americans out of work today, new "green jobs" will help. But for tomorrow, we need new green industries. And the only way to build those industries is by investing ambitiously now in basic and applied research."

Couldn't have said it better myself, Dr. Hockfield.

Since this is the third time now we've highlighted Susan Hockfield's spot-on remarks at the Breakthrough Blog, I think it's time she joins Energy Secretary and Nobel laureate Dr. Stephen Chu and dons the (entirely unofficial) mantle of "Honorary Breakthrough Institute Senior Fellow." Read on for her full remarks...

Continue reading "MIT President Hockfield at the White House: Investing in Energy R&D "Best Strategy" for Economic Growth" »

If Obama aims to successfully achieve a transformational presidency and launch a new progressive age, he must offer a new economic governance model that gives America a fresh start.

Cross-posted from The Huffington Post

By Teryn Norris & Adam Zemel

On Tuesday, President Obama signed the historic American Recovery and Reinvestment Act to avoid a spiraling economic downturn. But is it enough?

No. The Congressional Budget Office projects the U.S. economy will lose $2.9 trillion in total economic output over the next three years (PDF). To close that gap, Obama would need to sign a bill with approximately $2 trillion in total spending. But the current plan is less than $800 billion, with almost $300 billion for tax cuts. A recent report (PDF) by the chief economist at Moody's Economy shows that while one dollar of public spending can boost GDP as much as $1.70, every dollar of tax cuts can increase GDP by only $0.30 to $1.00. In other words, spending is up to five times more effective than tax cuts at boosting GDP.

So we have a stimulus bill that contains about $500 billion of public spending and $300 billion of dubious tax cuts. Given the CBO's projected $2.9 trillion output gap, calling the bill weak is an understatement. This gap presents a danger not just to the economy. If the economy is still dragging in two years, and the stimulus is publicly perceived as a failure, Democrats could not only lose the mid-terms in 2010, but the role of public investment could be discredited for years to come.

Continue reading "Obama Needs an Economic Philosophy" »

The House of Representatives approved the conference report of the American Recovery and Reinvestment Act today, by a vote of 246-186. Not a single Republican joined Democrats in approving this version of the bill, which was the product of long negotiations between leadership in both the House and Senate, as well as a block of centrist Senate Democrats and Republicans who have taken control of much of the debate on the stimulus.

The public investment numbers in the stimulus have bounced around during the countless negotiations, so if you've been following this crazy game at home (all twelve of you), here's our detailed summary, provided without further comment, of the energy-related investments and tax provisions in the conference version of the stimulus.

Assuming the block of centrist Senators remains supportive, this will be the version passed into law by the Senate soon, as early as later this evening.  Keep in mind that all spending will be spread out over roughly two years.

Continue reading "Detailed Summary of Energy Investments in Stimulus" »

In an op-ed in the Boston Globe today, Massachusetts Institute of Technology President Susan Hockfield championed long term federal investments in technologies and technology-based sectors as an engine of long term economic growth.

Hockfield invokes World War II and Cold War investments in education and fundamental and applied research and development, citing the many technological innovations--in electronics, aerospace, computing and communications and others--that directly resulted from these investments. These innovations, she points out, and created industries and growth sectors that provided decades of prosperity for the American economy. Hockfield writes:

With stimulus plans now in place, Congress and the Obama administration must plant the seeds of longer-term economic growth. Economists broadly agree that more than half of US economic growth since World War II has come from technological innovation, much of it stemming from federally funded, fundamental research. In the late 1990s, for example, US productivity grew at more than 3 percent per year. The revolution in information technology - a direct outgrowth of federally funded research - was pivotal to this extraordinary growth.

Citing the potential for future technological breakthroughs to help America overcome pressing national challenges, she continues:

Finding new energy answers may be the most pressing concern, given the implications of the current energy mix for the economy, national security and climate change. To help unleash an innovation wave in energy technology, the United States must go beyond the priorities of the stimulus package, which aims to create tens of thousands of "green jobs"; it must now invest in the kind of research and innovation that will ultimately spin-off millions of jobs by building a new economy. This includes investing in early- and later-stage research on the most promising technologies; funding new R&D centers to accelerate critical breakthroughs; equipping research labs with state-of-the-art instrumentation for advanced research, prototyping and demonstration of emerging technologies; and training a new energy talent base.

With debate over the stimulus coming to an end, progressives need to begin using the recovery bill as a springboard to advocate for a new model of governance that values sustained federal investments that can yield broad societal benefits and fuel economic growth. It is great that MIT's respected president is moving the discourse around creating a new progressive economic philosophy for forward.

(Read the whole op-ed after the jump)

Continue reading "MIT President Champions Federal Innovation Investments" »

After the American Recovery and Reinvestment Act passed in the lower chamber of Congress with absolutely no support from House Republicans two weeks ago, it was hard to predict what shape the debate would take in the Senate. But with perspective, the course of the Senate debate offers lessons for how we could secure investments in making clean energy cheap, and transform American politics in the process.

Just as it seemed that debate over the stimulus might stall, Ben Nelson, a Democrat from Nebraska, and Susan Collins, a Republican from Maine took the lead in an effort to bring a centrist approach to the bill in order to secure bipartisan support. What came out of this effort is a bill that slashes necessary and fast acting stimulus in the form of aid for state budgets and money for education, among other spending measures, while expanding tax cuts that will help the more affluent disproportionately to middle and lower class Americans.

Continue reading "Energy, Economy, and How to Rebuild the Center" »

An article in last week's New York Times delved into Japan's "Lost Decade," - the prolonged period of economic stagnation that hit the nation in the 1990s - and explores what lessons for U.S. stimulus efforts can be learned from Japan's efforts to restart their economy. The article's findings echo some of the arguments Breakthrough has been making regarding the stimulus debate. Japan's stimulus missteps reinforce the argument that our recovery program should be focused on modern infrastructure--not traditional public works--in addition to spending on other national priorities such as energy and education.

The Times story begins with a look at which types of public spending helped Japan grow out of its recession, and which types stifled recovery:

[I]t matters what gets built: Japan spent too much on increasingly wasteful roads and bridges, and not enough in areas like education and social services, which studies show deliver more bang for the buck than [traditional] infrastructure spending.

"It is not enough just to hire workers to dig holes and then fill them in again," said Toshihiro Ihori, an economics professor at the University of Tokyo. "One lesson from Japan is that public works get the best results when they create something useful for the future."

Continue reading "Lessons from Japan: How to Avoid A "Lost Decade" in America" »

Here is a remarkable display of incoherence. According to a report commissioned by Greenpeace and discussed by The Christian Science Monitor, the economic stimulus package now under debate by the U.S. Congress will reduce greenhouse gas emissions.

What does the report mean by "reduce"? It means that some future emissions that might have occurred will be avoided. Emissions will therefore increase, just not as much as under some other scenario. The difference between that other scenario and the scenario implied by the stimulus package represents a "reduction" in emissions. Yes, you are reading that right.

Continue reading "Cutting Emissions While Increasing Them" »

The American Recovery and Reinvestment Act is not sailing through the legislative process quite as easily as many pundits had anticipated. The stimulus received no votes from House Republicans last week, and this week GOP Senators are joining the tumult. The bill has become embroiled in a few debates that are more political than economic, and is certainly demonstrating what President Obama means when he says he wants to bring a spirit of bipartisanship to Washington.

Yesterday, Senate Republicans proposed an incredible array of tax cuts and incentives--some trying to encourage consumers to make bigger purchases like tax credits for car and home purchases, as well as a big increase in plain tax cuts. The GOP has been in the media criticizing the spending aspects of the bill as not being timely enough or just generally less preferable then tax cuts (although it's pretty clear there's a healthy dose of ideology mixed into this economic-sounding argument).

Meanwhile, a bipartisan group of conservative Democrats and moderate Republicans have also come together to try their hands at reshaping the stimulus. The New York Times reports:

Continue reading "The Politics of Bipartisanship Stimulates Debate over Stimulus" »

By Adam Solomon Zemel and Jesse Jenkins. Also posted at HuffingtonPost

Barack Obama's stance on energy issues is not the easiest to discern. While Obama the orator's language regarding energy has been inspiring - he's eloquently spoken of the need take bold steps and transform America's energy system - it is still not clear that Obama the President's policy ideas are similarly transformative. For a perfect case study, let's look at the seemingly ambitious goal to double renewable energy announced as part of President Obama's stimulus and recovery plan.

Early on, before the Inauguration, Obama gave his address announcing the key components of his stimulus plan. For clean energy, the big punch line was this:

"To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years."

On the surface, this sounds like an ambitious and transformative goal. Doubling alternative energy production in just three years sounds like quite a feat. But, as usual, the devil is in the details, and it all depends on what Obama actually means when he says "double alternative energy production."

Continue reading "From Rhetoric to Reality: Is Obama's Clean Energy Goal Really That Ambitious?" »

There's an interesting, if frustrating, piece by David Leonhardt in the New York Times Magazine this week on the need for a strategy for long-term growth, not just short term stimulus. In it he makes a critique of green jobs -- and offers up pollution pricing orthodoxy.

"Green jobs can certainly provide stimulus. Obama's proposal includes subsidies for companies that make wind turbines, solar power and other alternative energy sources, and these subsidies will create some jobs. But the subsidies will not be nearly enough to eliminate the gap between the cost of dirty, carbon-based energy and clean energy. Dirty-energy sources -- oil, gas and coal -- are cheap. That's why we have become so dependent on them.

The only way to create huge numbers of clean-energy jobs would be to raise the cost of dirty-energy sources, as Obama's proposed cap-and-trade carbon-reduction program would do, to make them more expensive than clean energy. This is where the green-jobs dream gets complicated."

It seems that this analysis is only half-right.

Continue reading "Carbon Pricing is No Engine for Sustained Growth" »

A recent report by the Information Technology and Innovation Foundation, headed up by Robert Atkinson, indicates that the technology investments in the proposed stimulus plan could create close to one million jobs. This report provides a powerful political and economic argument that any available options for technology investment beyond the $37 billion already included should be exhausted as part of the stimulus.

The report suggests that $30 billion to computerize health records, expand wireless broadband to rural areas, and create a new smart electric grid--the existing technology investments in the stimulus--would yield 900,000 jobs. The New York Times wrote about this report on Monday, accurately noting:

"Beyond creating jobs, advocates say, government investment in these technology fields holds the promise of laying a lasting foundation for more business innovation and efficiency, while helping to create new digital industries."

Continue reading "Technology Investments in Stimulus Will Yield A Million Jobs" »

The American Recovery and Reinvestment Act of 2009 passed through the lower chamber of congress today, putting the stimulus on track to be signed into law before Presidents Day Weekend. The entire Republican caucus was joined by 11 Democrats in opposition of the bill, passing with a vote of 244-188.

The voting record represents a setback to President Obama's vision of bipartisan governance. Despite meeting with the GOP caucus in order to field questions and hear concerns, Obama was unable to get any House Republicans to vote for the stimulus. TheHill.com reports:

Despite hinting that they might agree with Obama's initial call for a stimulus bill, Republicans in the end balked, and did so forcefully and unanimously, especially after the addition of more than $350 billion in spending by House appropriators.

It seems that Obama's decision to back off tax cuts that drew initial criticism from Congressional Democrats may have played a role in the complete lack of support from the Republican Caucus.

However, there are signs that a provision that has been added into the Senate's version of the stimulus, an adjustment of the alternative minimums tax, could succeed in garnering the votes of House Republicans when the bill arrives back for a final vote in the House. The tax code adjustment would hold down middle-class income taxes for 2009.

A version of the bill is currently working its way through the Senate, and is expected to garner more bipartisan support in its vote next week.

Read more about Breakthrough's thoughts on the stimulus:

• Passing the Recovery Test or: The Basic Political Reality for Climate Legislation in 2009
• Obama Stimulus: For Clean Energy, a Patchwork of Investments
• Obama Backs Off from Controversial Tax Cuts
• On Obama's Stimulus: Don't Look Back, Forge Ahead to a New Century of Prosperity
• How Deep is Public Support for Obama's Stimulus?
• Obama's Stimulus Plan: A Foundation for Growth?
• The Danger of Green Stimulus
• Forget Roads and Rebates: Why the Stimulus Should Invest in Innovation and Productivity

Barack Obama has finally been sworn in as the 44th President of the United States of America. For once, there is no debate among pundits or Capitol Hill insiders about what Obama's first priority will be as President. It seems like President Obama has been working on crafting an economic stimulus bill since November 5th, and now the real work begins in earnest.

Last week, despite reports from the Congressional Budget Office that our economy will likely face $2 trillion of lost production over the next two years, Obama rolled out a stimulus plan that only spends $825 billion to make up for this gap in production. A summary of the American Recovery and Reinvestment Act, released by the House Appropriations Committee, gives us the first detailed look at how this money will be spent and invested. Reading through the section devoted to energy in particular, a glaring lack of spending and the absence of any sort of cohesive guiding framework both give reason for pause.

Continue reading "Obama Stimulus: For Clean Energy, a Patchwork of Investments" »

Rumblings on Capitol Hill indicate that Barack Obama is backing off some of the more controversial - and potentially least effective - tax cuts that he had planned on fitting in to a stimulus bill. Democrats in both houses viewed the inclusion of so many tax cuts in Obama's stimulus plan as an overplay for Republican votes on a critical piece of legislation that could set the tone for the President-elect's subsequent four years in office.

According to the New York Times, Obama now plans to scale back some of the tax cuts and reinvest that money in clean energy incentives:

"After Senate Democrats complained last week that the tax package proposed by the Obama team did not focus enough on job creation or on the energy sector, lawmakers said that the incoming administration had agreed to drop a proposed $3,000 tax credit per new employee and to add more energy-related tax breaks."

Continue reading "Obama Backs Off from Controversial Tax Cuts" »

Last week, Obama announced his stimulus package, a plan to spend nearly 800 billion dollars on infrastructure projects, modernizing schools and health records, expanding clean energy production, providing much-needed relief for state budgets, and extending tax cuts to 95% of working Americans.

By most standards, this is a big stimulus plan that could do a lot to bolster confidence, increase consumer spending and unfreeze credit. And yet, as Paul Krugman put it last week,

"To close a gap of more than $2 trillion -- possibly a lot more, if the budget office projections turn out to be too optimistic -- Mr. Obama offers a $775 billion plan. And that's not enough.

... The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job."

Continue reading "On Obama's Stimulus: Don't Look Back, Forge Ahead to a New Century of Prosperity" »

Yesterday, Barack Obama introduced some of the basic priorities and projects of the stimulus plan he will work to enact in his first few weeks as President. From traditional infrastructure projects like road and bridge repair to R&D in energy and health sciences, the package includes a wide range of public spending projects. In addition, the package also includes budget relief for state governments, and a $1000 dollar tax cut for 95% of working American families.

A recent poll commissioned by Politico showed that 79 percent of respondents favor Obama's proposal. This makes sense--unemployment is rising, home values are on the decline, and everyone is worried about their savings. But how deeply rooted is public support for a nearly trillion dollar stimulus? The same poll illuminates a degree of cognitive dissonance in the public's thinking about the economy that might undermine long term support for any next steps Obama takes.

Continue reading "How Deep is Public Support for Obama's Stimulus?" »

In Northern Virginia today, President-elect Barack Obama addressed the nation, introducing a few basic goals and guidelines for an economic stimulus package that could cost as much as a trillion dollars.

Well aware that the large price tag on the stimulus, referred to as the "American Recovery and Reinvestment Plan," Obama included language about setting a foundation for economic growth now in order to return to a place of fiscal responsibility as the economy gets back on its feet. However, Obama was not shy about the need for the government to step in and spend, now:

"It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy - where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit."

Continue reading "Obama's Stimulus Plan: A Foundation for Growth?" »

The Huffington Post has featured an op-ed by me and Jesse Jenkins, "The Danger of Green Stimulus," which issues a cautionary note about losing sight of climate objectives amidst all the fervor about green jobs and green stimulus:

The Danger of Green Stimulus
By Teryn Norris and Jesse Jenkins
The Huffington Post
January 5th, 2009

Barack Obama's final appointments in December indicate a strong commitment to action on climate change. Steven Chu as Energy Secretary, Carol Browner as Energy & Climate Czar, John Holdren as Assistant for Science and Technology -- just to name a few recent selections -- are all proponents of vigorous action to cut U.S. global warming pollution and take leadership on a new international climate treaty. And Hilda Solis, Obama's new Labor Secretary, is a champion of "green jobs."

All is well on the climate front, it seems. Except that it's not.

Carbon cap and trade regulation remains the top federal policy priority for the majority of environmental groups. But in June, cap and trade legislation failed in the Senate, and sixteen Democratic Senators from coal and manufacturing-heavy states voiced their opposition to high carbon pricing. The policy faces even greater obstacles in today's economic climate, since it would increase the energy bills of the American public.

Continue reading "The Danger of Green Stimulus" »

On January 21st, immediately after assuming office, Barack Obama's first priority will be passing an economic stimulus package that will provide the economic kick-in-the-pants necessary to avoid the next Great Depression. There's nearly unanimous consensus that a major stimulus investment is needed to stave off economic disaster. How the next administration plans to fit this stimulus into a larger economic revitalization plan, however, is still unclear.

So far, there's plenty of focus on traditional methods of stimulus: tax cuts to spur consumer spending and traditional infrastructure investments to rebuild roads and bridges. Unfortunately, a short-term focus on roads and rebates won't be enough to stave off a new depression or put our economy back on track. Instead, we must focus on investments that can both act as short-term stimulus and improve the long-term productivity of the US economy. And that means investing in innovation.

As Janet Rae-Dupree wrote in the New York Times on Saturday:

Continue reading "Forget Roads and Rebates: Why the Stimulus Should Invest in Innovation and Productivity" »

An efficiency stimulus plan seems at first glance to be an unadulterated good: it puts Americans to work, saves energy and money, and cuts greenhouse gas emissions, all with investments that should pay for themselves. But there are reasons to be nervous about the overwhelming focus on energy efficiency by green leaders and Obama's top energy and climate advisors. This narrow focus threatens to distract from the critical work ahead: overcoming the technology gap that exists between the current state (and cost) of today's clean energy technologies and fossil fuels.

An efficiency program will not create the new industries that the American economy needs to increase employment and productivity in the long term. An efficiency program will not create new exports that will bring global capital in to the American economy. And, equally as important as short term stimulus, America needs to have a plan to achieve those objectives as quickly as possible as well.

Obama's primary focus must be on making clean energy cheap -- what Google calls RE<C, renewable energy cheaper than coal -- not on reducing energy consumption.

Continue reading "Will Energy Efficiency Stimulus Distract America from the Real Task at Hand?" »