“During this emergency, specific attention should be paid to the emergent, yet vulnerable, clean energy industry,” Michael Brune, executive director of the Sierra Club, wrote in a letter Thursday to top U.S. lawmakers. “The clean energy industry faces the same stresses as the travel, restaurant, sports, and entertainment industries, with a new reality of forced closures and layoffs.”
Fatih Birol, executive director of the International Energy Agency, said in an interview that as governments around the world tailor stimulus packages, they also have a chance to combat climate change by aiding the shift to clean energy.
“We have two curves we need to quickly bend downward,” Birol said. “One is the coronavirus infections, and the second is global emissions — neither of them will be easy.”
As of the end of 2019, he said, about 70 percent of global energy investments were made either directly by governments or in response to government regulations.
“We have a historic opportunity to steer those investments to a more sustainable path,” he said.
Many policymakers caution against weighing down a stimulus bill designed to stabilize the economy. Congress and the White House are looking at a draft $1.8 trillion package that contains cash payments to individuals, loans to small businesses, a $50 billion rescue program for sputtering airlines and $17 billion for firms linked to national security. A draft version of the measure leaves $425 billion for the Treasury to hand out to ailing firms, without specifying which companies or industries.
Funding is also desperately needed to keep hospitals from going on financial life support.
“The most important thing of all is anything that slows the spread of the virus. We should be spending astounding amounts on that in every way,” said Austan Goolsbee, an economics professor at the University of Chicago’s Booth School of Business. Goolsbee, who was the chairman of President Barack Obama’s Council of Economic Advisers, said “only if we succeed at that can any of the other things succeed.”
But many climate activists say there is no conflict. “We are all very supportive of cash transfers,” said Daniel Aldana Cohen, a sociology professor at the University of Pennsylvania and one of 10 signatories of a letter asking Congress to alter the economy. “From our perspective there will be a stimulus no matter what. But it would be insane to reflate the fossil economy as it was.”
The group — which includes advisers to Sen. Bernie Sanders (I-Vt.), a Democratic presidential candidate, as well as the defunct campaigns of Washington Gov. Jay Inslee (D) and Sen. Elizabeth Warren (D-Mass.) — has drawn up a $2 trillion “green” stimulus plan. It includes everything from $1 billion cash for trading in old energy-wasteful household appliances to an extension of renewable energy and electric-vehicle tax credits.
The proposal would also establish a revolving fund to purchase fossil fuel firms that are going bankrupt to “decommission assets” and manage the firms’ decline.
Brune agreed with using the stimulus to diminish oil, gas and coal sectors. “No additional giveaways to polluters should be included in any stimulus package,” he wrote. “The fossil fuel industry is already heavily subsidized by the federal government.”
The IEA’s Birol argues that investing in low-carbon energy generation as part of a stimulus won’t be good just for cutting emissions, but would also make financial sense.
Wind turbines, solar panels and other renewable technologies cost only a fraction of what they did in 2009, when Congress passed its last major stimulus package in the wake of the financial crisis. In addition, the clean energy sector now employees far more people and has the capacity to employ many more.
“I don’t see any contradiction between wanting a quick recovery and accelerating clean energy transitions,” Birol said. “It can accelerate the quick recovery if we make the right investments. … If we go for the wrong investments in the energy sector, that could lock in our energy system for years to come.”
Earlier this month, the Solar Energies Industry Association published its 2020 projections forecasting nearly 50 percent growth this year. Suddenly, that boom seems unlikely, and the group has been imploring lawmakers to extend existing tax credits and make other adjustments to make sure solar power continues to grow the way it has in recent years.
On Thursday, SEIA and a collection of green energy groups, including the American Wind Energy Association, asked lawmakers to help deal with delayed projects and threatened supply chains.
“If Congress was trying to solve the problem of how to keep people employed, create new jobs and invest in local communities, that’s solar,” Abby Hopper, SEIA’s president, said in an interview. Hopper noted the Labor Department lists solar installers and wind turbine technicians as two of the nations fastest-growing careers.
“We proved year over year over year that we can employ more and more Americans,” she said, adding that such growth bolsters the tax base that funds schools and other services. “This is an industry that can ramp up quickly.”
Paul Bledsoe, a strategic adviser at the Progressive Policy Institute and a Clinton White House climate adviser, argues that a stimulus bill should focus on “helping the U.S. automakers compete in production of technologies for the burgeoning electric-vehicle market, as well as more robust consumer tax credits to boost demand for domestically produced EVs.”
Bledsoe said transportation is the largest source of U.S. carbon dioxide emissions, overtaking the electricity sector in recent years.
Yet with Saudi Arabia and Russia amid a crude oil price war, EVs not only face previous hurdles in the way of mass adoption and sales but also “additional headwinds of far cheaper oil,” which makes it harder to appeal to motorists’ pocketbooks.
Many groups also say that if Congress and the administration are able to help the airline, oil and gas industries, then they should be able to help renewable energy industries.
More than 200 climate, environmental, social justice and workers’ rights groups argued last week that any federal relief for the U.S. aviation industry “be conditioned on the industry agreeing to take necessary steps to ensure the safety of our climate, impacted workers, and affected communities,” according to a letter to congressional leaders.
“Simply put, the aviation industry must begin decarbonizing now,” the groups wrote. “Accordingly, any financial assistance from Congress, tax relief, loans or grants must be conditioned upon reductions in greenhouse gas emissions from the U.S. airline industry.”
“Fracking billionaires and coal companies who were struggling financially well before this crisis are already banging down Trump’s door for handouts, which would further worsen the climate emergency and deepen inequality,” Jack Shapiro, a senior climate campaigner for Greenpeace USA, said in a statement Friday. “Our tax dollars should go to supporting struggling families and working people, not bailing out big corporations.”
Many economists and climate experts look to the massive stimulus bill Obama signed in 2009 when the Great Recession was freezing the financial system and bringing industries such as the auto industry to a grinding halt.
Although the legislation was designed to stimulate the economy, it also included the biggest ever assistance to the development of renewable energy and other energy technologies and research.
Bledsoe said that out of the $840 billion in the Obama stimulus bill, about 10 percent went to “clean energy” broadly defined. Of that, $21 billion went directly to renewable energy, a small fraction but still a large amount of money.
Although some of the renewable energy stimulus money went to research and development, most was used to extend tax credits to deploy existing technologies, especially solar and wind. Much smaller amounts paid for direct tax credits for new types of clean energy manufacturing.
By contrast, Bledsoe added, the Chinese government in 2008 devoted nearly half of its $650 billion stimulus plan to clean energy manufacturing subsidies, focusing on solar photovoltaic panel production and electric-vehicle manufacturing. China controls 73 percent of the global EV battery market, Bledsoe said.
“We have a choice to bail out the past or build the future,” Greenpeace’s Shapiro said. “We cannot let our response in this moment be driven by corporations looking to exploit a crisis for their own gain instead of supporting working families.”