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Solyndra stunk. The green stimulus didn’t.

The federal clean-energy loan guarantee program that gave you Solyndra wasn’t just a multibillion-dollar political debacle – it also didn’t create jobs, didn’t reduce carbon emissions and ran up financial risk for taxpayers.

And yet, the program wasn’t enough of a bust to outweigh the job-creation and emissions-reducing successes of the complete $90 billion “green stimulus” the Obama administration built into the $800 billion American Recovery and Reinvestment Act four years ago, as the country was plunging deeper into recession.

These are the conclusions Harvard University economist Joseph Aldy reaches in a new research paper on the economic and environmental effects of the Recovery Act, just published online by the Review of Environmental Economics and Policy. They’re notable – particularly the harsh critique of the loan guarantees – because Aldy helped craft the act from inside the White House. (Here is an earlier version of the same paper available without a subscription.)

His top-line, and unsurprising, takeaway is that the green stimulus was worth it – perhaps not optimally cost-effective, but still important for both jobs and carbon, even if neither unemployment nor emissions levels are where America needs them to be today.

Creating jobs was the big goal behind the Recovery Act, but it wasn’t the only goal. President Obama and his advisers hoped to put a “down payment” on efforts to reduce emissions and avert the most dramatic potential effects of global warming, largely by promoting renewable electricity generation and energy-efficiency measures. Hence the package of grants, tax credits, green jobs programs and, yes, loan guarantees, that made its way into the bill.

Aldy was one of those advisers, the in-house economist in Obama’s office of energy and climate change. His new report suggests that the green stimulus provisions were a better value for job creation than for emissions reduction.

He cites administration calculations that the provisions yielded about 720,000 jobs and leveraged billions of dollars of investment in renewable power. That’s particularly true in the wind industry, which boosted its generation capacity nationwide by 60 percent from 2008 to 2010. That essentially speeded up Energy Department projections for wind installation by 20 years. “Wind was basically dead without the Recovery Act,” Aldy said in an interview.

Emissions are a trickier story. On one hand, Aldy credits all that new wind generation – and solar installations driven by grants and tax credits – with at least a 2 percent reduction in power-plant emissions. He also contends the effects would have been multiplied if Congress had approved a bill to limit emissions, such as the cap-and-trade bill the House passed in summer 2009.

On the other hand, Aldy concludes that the marginal cost to taxpayers of the stimulus-driven emissions reduction “could be significantly higher than the marginal benefits,” based on what the government calls the “social cost of carbon” – the dollar value on the damage from carbon dioxide emissions.

Aldy is particularly critical of the loan guarantees handed out to the now-bankrupt Solyndra, along with a handful of other firms. The guarantee program was slow moving and bureaucracy-intensive; it took 100 to 200 federal officials and contractors to decide who would receive the eight loan guarantees. It left taxpayers with a $500 million liability when Solyndra folded and no discernible benefits across the board.

The program “had no meaningful impact on the economy, no meaningful impact on the energy system,” Aldy said. “The dollars spent per ton of carbon avoided are very high… as an economist, you actually can’t estimate infinity.”

Contrast that with the big success of the green stimulus: a grant program that partially subsidized any new renewable power project that met its specifications. It helped fund nearly 5,000 projects and about 10,000 megawatts of renewable electricity. Because the program gave the government no discretion in handing out grants, it kept politically connected firms from influencing the results.

There’s a clear lesson there for policymakers, and not just in the energy space, Aldy said. “If you want policies that drive investment, and you want to support them in some way, make the program simple and transparent. And if you want to get rid of the politics, get rid of the discretion.”