Wednesday, January 14, 2009

The Stimulus Package Must Include a Commitment to Green Energy

[This article also appears on You can access it from my author page here.]

When Barack Obama takes the oath of office next Tuesday, he will have a huge pile of problems on his Oval Office desk awaiting his attention. (Thanks George W.!) You have to think, though, that the number one issue facing him will be pushing through a stimulus plan to help the economy out of the current morass. Economists from both sides of the aisle seem to agree that some kind of stimulus is necessary. While I fear partisan bickering will delay or water down the final package to the point that it doesn't address the dire problems in the economy, I am even more concerned that in the battle, an important (maybe the most important) component will be lost.

Whereas a plan like the $700 billion financial bailout worked on one level (keep the financial system from collapsing), the stimulus package should, if it's done right, work on two equal tracks: In addition to the obvious -- boosting the economy by increasing consumption via government-funded projects -- the nearly unprecedented government investment in the economy also provides a unique opportunity to reposition the country for success going forward regarding our energy policy. What concerns me is that even if not a single dollar of stimulus money goes to pork, and every penny goes to projects that will actually contribute to our society (like building highways and schools), we still could miss out on a golden opportunity, one that may not happen again for quite some time.

As a nation, we can no longer avoid the fact that from an economic, environmental and foreign policy perspective, the energy policy (or lack thereof) that has reigned for the last 60 or so years cannot be sustained. No matter how you spin the energy situation, the U.S. is a follower, not a leader. We use far more oil than we produce. We do not build vehicles that our citizens want to buy. And we don't have any national plan or commitment to address our dependence on foreign oil. It seems to me that this massive government stimulus initiative, if combined with government action and, more importantly, a commitment by Americans, can launch the United States into the forefront of world leadership on energy. But if we don't act, we will just fall behind again.

Consider these two news stories that quietly broke in the last week. Toyota announced that it is speeding up its production of green vehicles, and that it will introduce an all-electric car for sale in the United States in 2012. The car will release only 99 grams of carbon dioxide per kilometer. Even more troubling was the news that Abu Dhabi plans to spend $15 billion dollars -- to start -- to develop green energies. Realizing that oil is a finite resource, the Abu Dhabi crown prince wants to make sure his government will continue to prosper in the future energy market. The plan includes building a "zero-carbon" and "zero waste" city of 15,000 people in the next few months.

So while the Democrats in Congress complain that too much of the stimulus package is dedicated to tax cuts, and while the Republicans try and slow the stimulus train down as best as they can (especially direct aid to the states), the Japanese are jumping ahead of us in the future generation of car production, and Abu Dhabi is beating us to the punch with green energy.

Do we really want to lag behind again?

Barack Obama has said often, "This is our moment." I know I'm moving his words to a new context, but this is our moment to assert control of the next generation of energy production and use. It's time for a confluence of government and industry, rules and innovation, investment and sacrifice. It's time for the government to set standards for vehicle efficiency that revolutionize how we look at car travel in this country. It's time for the government to create an atmosphere in which American automakers (assuming there still are any in the near future) know what they have to do to take the lead in the next generation of green vehicles. And it's up to the American people to agree to the changes in habits that will allow all of these initiatives to flourish.

And none of it can happen if the stimulus package doesn't sufficiently address these issues, providing the money and direction to ensure that the United States can take the lead in green energy production and smart energy usage policies.

Luckily, it seems like Barack Obama is on board with this approach to the stimulus package and our future. On Meet the Press on Sunday, former Congressman David Bonior (of Michigan, not incidentally), an Obama economic advisor, said this:

"But I would say that if we run this--we run the program that President Obama has suggested on the spending side through a prism of a green new energy economy, there ought not to be a worker in this country, a building trades person that's on the bench. They out to be out rebuilding our schools, our highways, our bridges, our buildings, our office buildings, our autos and our trucks. All of that needs to go through a prism of a green new energy economy, because I think that's the new economy that he is striving for, the president and the Congress, and that's the one that's going to really bring us out of this."

My hope is that when the Democrats and Republicans in Congress are finished with their political turf battles, the notion expressed by Bonior survives.

As a country, we are tired of playing second fiddle to the Japanese in the car industry (with the resulting loss of jobs) and to the traditional oil-producing countries on energy. We are tired of the economic impact of our oil dependence, as well as the foreign policy decisions that result from our oil addiction. And we should all be worried about global warming and other environmental perils that have resulted from our lack of an energy policy. The stimulus package needs to do more than just jump-start the economy; it needs to make sure that as the 21st century energy world order takes shape, this time, the United States is at the forefront.

The Japanese and Abu Dhabi aren't waiting to make their initial moves. We shouldn't be, either.